KPO Celebrates FPSA 10th Anniversary

Karachaganak (KPO) celebrates the 10th Anniversary of the signing of the Karachaganak Final Production Sharing Agreement (FPSA).

In 1997, an international consortium including BG Group, Eni, Chevron and LUKOIL reached a major milestone with the conclusion of the FPSA in Washington DC. The FPSA established the formal relationship between the operating venture and the Republic of Kazakhstan and it continues to govern the development of the giant Karachaganak field.

Karachaganak produces over 10.5 million tonnes of stable condensate annually, much of which is delivered to high value western markets, and approximately half of the 14.4 billion cubic meters of gas production is shipped to Russia. It is Kazakhstan's largest gas producing field, accounting for some 49% of the country's total gas production and around 18% of total liquids production.

Achieving this level of production is no small feat.

In developing the field to date, international partners have brought leading and in some cases, pioneering technology. This has enhanced hydrocarbon recovery and harnessed significant value for the Republic of Kazakhstan.

According to KPO General Director, Roger Fox, "Today represents a major milestone for both KPO and the development of Kazakhstan's hydrocarbon sector. In partnership with the Republic of Kazakhstan and KazMunaiGaz, we have achieved a great deal in the last decade.

"Karachaganak is one of the largest international projects in Kazakhstan, with total investment exceeding $5.5 billion. We have constructed and commissioned new facilities, which utilize leading production and hydrocarbon processing technology. This has been done in accordance with the highest safety and environmental protection standards.

"Karachaganak does not only represent vast resources, its development has also brought enormous benefits to Kazakhstan and the communities within the West Kazakhstan Oblast. KPO supports many social and infrastructure projects, training and development, and local content initiatives.

"We are confident the next ten years will prove equally exciting as we continue work to develop an economically and technically feasible expansion project for the field, which will result in significant increases in production. This multi-billion dollar investment will create hundreds of new employment opportunities and significant benefits for the region and the Republic", added Roger Fox.

Since signing the FPSA, KPO has modernized existing infrastructure and commissioned new processing and re-injection facilities, drilled a substantial number of new wells and constructed a 160-megawatt power station. The 635-kilometer Karachaganak – Bolshoy Chagan – Atyrau pipeline was also constructed. This connects the field with the CPC pipeline, which delivers hydrocarbons to high value world markets via the Black Sea.

In 2003, President Nursultan Nazarbayev officially launched first oil exports from Karachaganak.