KAZAKHSTAN - The Geology & Reserves

There are five big basins in Kazakhstan: the Pre-Caspian, mostly offshore; South Mangyshlak; North Ustyurk-Buzashki; Turgai; and Chu-Saruso. All the major proven and probable reserves are concentrated in these basins.

Nine other sedimentary basins in the country have promising oil and gas shows, with estimates for these being put at up to 1 bn tons of oil equivalent.

Almost all the major oil and gas discoveries in Kazakhstan were made by Russian geologists during the Soviet era, as in the case of Azerbaijan, Turkmenistan, Uzbekistan and other former Soviet republics.

The Caspian Sea has four major oil and gas bearing regions: (1) the North Caspian Basin, where the potential reserves are now estimated at 100-120 bn barrels of oil and 110 TCF of gas, in both the Russian and Kazakh sectors; (2) the South Caspian Basin, where since 1870 more than 14 bn barrels of oil and 18 TCF of gas have been found; (3) the Terek Caspian/Indol Kuban Basins, estimated to contain recoverable reserves of 7 bn barrels of oil and 21.5 TCF of gas; and (4) the Ust Yurt/Aral and Mangyshlak Basins, which are believed to contain around 6.5 bn barrels of oil.

The Kashagan formation in the Kazakh sector of the North Caspian is believed to be the richest in oil. It forms a westward arc from the eastern Kazakh shore of the Caspian. This formation and other areas of the Kazakh sector, consisting of 50 to 100 oil-bearing structures, are said to contain up to 100 billion barrels of oil.

At a symposium in Geneva in June 1993, Dr. T.K. Niyazgaliev, head of the Department of Reserves and Resources at the Kazakh Scientific Research Geological Exploration Petroleum Institute (KazNIGRI), estimated potential resources in the offshore Caspian and onshore Atyrau regions at 8.7 bn tons of oil, 1.77 bn tons of condensates and 7.92 TCM of gas. Kazakh experts say the potential resources and existing reserves for all hydrocarbons could exceed 16 bn tons of oil equivalent. At present, however, the proven reserves - excluding those of Tenghiz and Karachaganak - are limited relative to the reserves of the Persian Gulf region.

Located between Russia and Uzbekistan, Kazakhstan borders on the Caspian and Aral seas and is landlocked. It has a land area of 2,717,300 sq km. Its boundaries are 12,012 km long - 6,846 km with Russia; 2,203 km with

Uzbekistan; 1,894 km on the Caspian; 1,533 km with China; 1,051 km with Kyrgyzstan; 1,015 km on the Aral Sea; and 379 km with Turkmenistan. The terrain extends from the Volga to the Altai Mountains and from the plains in West Siberia to oasis and desert in Central Asia.

           KAZAKHSTAN PROVEN HYDROCARBON RESERVES, 1997

               Oil (bn bls)     M Tons     Gas (BCM)     TCF

End-1997           8.0          1,100        1.84         65

End-1994           5.3            700        1.84         65

OIL PRODUCTION 1985-97

(in '000 b/d)

    1985     1991     1994     1995     1996     1997

     465      570      430      435      475      535

GAS PRODUCTION 1985-97 (in BCM/year)

     5.1      7.4      4.2      5.5      6.0      8.2

Source: BP Statistical Review of World Energy, June 1998.

The leaders in Kazakhstan say their country's reserves of oil, condensates and natural gas will eventually exceed Kuwait's 13 billion tons of oil equivalent. The country's biggest reservoir is the Pre-Caspian which includes the biggest oilfield, Tengiz, and the biggest gas and condensate field, Karachaganak.

Apart from its hydrocarbon resources, Kazakhstan is rich in uranium, gold, iron ore, chrome ore, nickel, cobalt, molybdenum, lead, bauxite and aluminium oxide. The country has the world's largest reserves of zinc, wolfram, barite and molybdenum. It has the world's third largest reserves of copper and manganese. During the Soviet era, Kazakhstan accounted for nearly 20% of the USSR's output of coal and half its reserves of lead, tungsten, copper and zinc. Kazakhstan has large deposits of titanium, magnesium, chromium and phosphates which are mined and processed in the country. It also processes iron ore, bauxite and aluminium oxide.

During the first five years of independence from 1992 production of these minerals fell sharply. The huge mines, smelters and industrial plants suffered from lack of fuel, funds, spare parts and technology. The country lost its traditional markets in the former Soviet Union (FSU). The situation began to improve in 1997, with foreign companies having joined Kazakh firms in producing ventures.