Pinpoint Kazakhstan on the map

Why Kazakhstan?

Posted on: 26/03/2015 in: Export, New markets

There are plenty of testimonials out there about how exports have not only transformed the growth of a business, but also secured its future. When you’re considering potential export markets, there are, of course, many factors to consider, but ultimately, it’s about where your products, services or new technologies will sell. Put aside all the practicalities of export for a moment (because in fact it could well be easier than you think!) and simply think about where your business could be in demand. And it’s not always in the most obvious places! Introducing Kazakhstan…

Kazakhstan has been producing oil for over 100 years and has the second largest oil reserves and oil production of the former Soviet republics after Russia.  Production had reached record levels by the 1970s and with the assistance of major international oil companies from the mid-1990s, production levels soared still further, last year amounting to a staggering 1.7 million barrels per day. Over the last 10 years, an increase in production of natural gas has further boosted oil production, (it’s used in large volumes for reinjection into oil reservoirs). Interestingly though, the country’s consumption level of natural gas has remained largely static – the population is widely dispersed over a huge area, making it both difficult and costly to connect supply and demand.

It’s important to remember that Kazakhstan is a country the size of the whole of Western Europe, with a wealth of natural resources in addition to its oil and gas reserves. However, it is also a landlocked country and its lack of access to the seas means that it has to rely primarily upon pipelines in order to transport oil and gas to the global marketplace.

Oil production is currently dominated by two huge on-shore fields in the north west of Kazakhstan – together Tengiz and Karachaganak produce around half of the country’s output. Another major field is the Kashagan field, an off-shore field located in the Caspian Sea – its huge recoverable reserves (estimated at between 8 and 13 billion barrels) make it the fifth largest field in the world. Complex production issues caused by adverse operating conditions have slowed the development of this field. In brief, the field is situated over 13,000 feet below the seabed where pressure levels are high. Added to this is the presence of a high level of hydrogen sulphide, a highly toxic and corrosive gas, which it is believed may be behind pipeline leaks. New drilling and production technologies have been and continue to be required as well as replacement pipelines made from higher grade and corrosion resistant materials. Once these issues are finally resolved, this field will also make a significant contribution to oil production levels.

The future of Kazakhstan as a leading oil producer rests on the expansion, development and of these three fields, which are all in various stages of discussion, planning and progress.

If you think your business could help resolve any of the challenges of oil production in Kazakhstan, why not get in touch? It could become the first chapter of your business growth success story!