Nysanbay Kuantayev: Talks that remained oil reserves sufficient for 30 years misleading

Almaty. August 7. KazTAG - Vladimir Radionov. According to various estimates, the world's hydrocarbon reserves, taking into account the growth of consumption remained sufficient only for 30-40 years. These same estimates concern the subsoils of Kazakhstan. Vice-president of the company First International Oil Corporation (FIOC), candidate of geological-mineralogical sciences Nasynbay Kuantayev declares that such predictions  groundless. In the interview he told KazTAG about the potentials and prospects of the Kazakh oil and gas industry.



- Nysanbay Yesirkepovich, how would you assess the potentials of Kazakhstan in the sphere of oil and gas?



- Potentials and prospects are adequate. Those assumptions that the reserves will be exhausted, and so on - it is not serious talks of the layman.

The origins of Kazakh oil date back to 1899, when  the first oil gusher in the structure of Karachungul was received. Officially, oil production began in 1911 at the field Dossor. Until 1961 oil production was mainly carried out at  the Emba fields. The Mangyshlak oil era began with the discovery of large deposits of Zhetybai and Uzen in 1961.

Of course, long time has passed since those days, so many old industries have passed their peak production, they developed reserves o up to 90% or more, and they are at the late stage of development. In addition, the current state of production of many companies is characterized that easy oil has been extracted and here comes the hard to do stage.

However, in general,  we have the hydrocarbon potentials and prospects of production. Confirmation of this is the study conducted by a group of authors entitled "Scientific substantiation of the hydrocarbon potential of Kazakhstan", which was recently promoted by the national company "KazMunayGas" for the nomination for the prize named after  Al-Farabi in 2015 in the field of science and technology.

In it the authors based on the specification of the geological structure of the 15 sedimentary basins in Kazakhstan carried out a quantitative evaluation of the hydrocarbon potential, it turned out to be 3 times higher than the previous estimate, and it is estimated at 76 billion tons of equivalent fuel. A significant part of the resources  are projected in the Devonian and pre-Devonian deposits in the Caspian region. This volume is huge!
Of these, 64 billion tons are of the Caspian Basin, where we have the main production. But, nevertheless, we will keep on studying the eastern basin, we will continue to explore, as their capacity has increased.

In addition, in this work specific recommendations have been given where some geophysical work should be carried out. This will allow us to look into the deeper levels and to predict what we will have in the future.

Now we find oil at 10 kilometers depth and it is a fact. People extract oil at 10.5 kilometers depth in Vietnam, in the Mexican Gulf. In Vietnam, oil is produced directly from the granite.
The prospects of finding oil and gas in general are changing dramatically. It's quite interesting. And we can rely on the fact that those concerns that oil reserves remained only for 30-40 years are misleading.



- You've just mentioned that according to the latest estimates the potential is really high. And when was the latest estimate prepared?



- Previous estimates date back to the 80s of the last century.



- It turns out that there has been no scientific research in the field of oil and gas for 30 years?



- There has not been any major. There was a period associated with the collapse of the Soviet Union and the parade of sovereignties, when everything collapsed: the budget had no money, in fact no exploration activities were carried out for 15-20 years.
Then, thanks to the reasonable policy in the subsoil field  investors came who got the contract territory. And due to the commercial secret they did not show the information to anyone they received in the result of exploration works.
These factors overlapped, and scientists could not do more or less complete generalization. Even in the preparation of the study which have I mentioned above, I know, the authors had to work hard to obtain information held by investors.



- Could you tell more about the study?


- Rigorous scientific analysis enabled the authors, in addition to the above, to issue recommendations on specific areas of exploration, to provide scientific foundation for the expansion of the range of possible productive stratigraphic deposits and the presence of large objects at depths of 5.5 to 7.5 kilometers, capable to accumulate significant reserves of hydrocarbons and lead to major discoveries in the near future.

The results of the research have become the basis for a unique innovative project "Eurasia", approved by the Presidents of Kazakhstan and Russia. The quintessence of the scientific research is compiled for the first time in a unique atlas of oil and gas basins of Kazakhstan, it has received a positive assessment of President Nursultan Nazarbayev.
Overall, the work has a scientific, social and practical value, and really deserves the award of the state prize.
A few words about the authors of this unique work. It is our colleagues Ural Akchulakov, Geroi Zholtaev, Baltabek Kuandykov, Kurmangazy Yeskaziyev, Peter Kovryzhnyh, Eugene Ogay. All of them are professionals, renown scientists.



- You said that scientists have proposed the oilmen to  "dig" not only in the West but also in the East of Kazakhstan - near the lake Balkhash, Tengiz, Zaisan ...



- The works are underway. And the recent discovery is the gas field in the Zaisan dimple. Development has been adjusted there, the gas is being extracted at  500-600 meters depth, the reserves - about 4 billion cubic meters. First, it was planned to direct this gas to Ust-Kamenogorsk, but the volume of deposits was considered inadequate for long use.

Therefore, our Chinese partners built a gas pipeline, and the produced gas is sold to China. In the present research work this basin was also considered, its potential has also undergone significant changes in the direction of increasing.
The exploration work is underway in the Alakol basin.
Great amount of seismic work has been done, and a number of wells in different depths have been drilled, but we have not seen any positive results yet. Now it makes sense to look at those regions where oilers have not been to.



- Are the investors  interested in carrying out such work? Alternatively, their interest lies in the extraction of oil in the Western region and the subsequent shut down of their activities?



- Not really, of course. Now those fields that were discovered in the 60-80s of the last century are in development by the national companies or investors. Those investors that came later, have to go to the exploration blocks, and there are a lot of them, in particular, there are many Chinese companies.

If exploration is conducted correctly , oil will be found. We need to use those recommendations, which the science gives us, and to involve Kazakhstani geologists who know the geology of Kazakhstan and its perspectives.
Geological school, I must say, is  quite powerful in our country.


- By the way, do we train people for the exploration sector? For example, water experts say that there are serious gaps in the training of engineers, hydrogeologists.



- There are certain costs in this regard. But progress is being made in education and training. This year I chaired the state examination commission in KazNTU name after Satpayev, I graded the exams, graduation projects of the graduates. I can say that today's college students have turned to knowledge.
If one used to need a diploma, now we need knowledge. None of the specialists can find employment without knowledge.




- Let's talk about oil prices and their impact on the budget. At recent public hearings, academician Gafar Yergaliev declared that the replenishment of the state budget is 80% dependent on the production and sale of oil. That is, if oil production drops as well as its price there will be collapse of the budget?




- Well, this is, of course, will not happen. Thanks to geologists  a powerful mineral base has been created, it has become a powerful boost, the engine of our economic development. Now Kazakhstan has significant dividends from the sale of both hydrocarbons and other minerals. With the fall in prices the situation will be a little bit worse, but still not as critical as it seems at first glance.
Today's price level allows the companies to operate at a profit, but frankly speaking - on the verge. For example, the lowest limit of Emba oil profitability is about $ 60 per ton. If the world price, for example,  drops to $ 57, the miner will lose up to $ 3 per ton and go at a loss.


- You said that the percentage of hard to get oil is growing.  What if many companies face loss in their activity taking in account low level of the world prices?



- This concern really exists. And now, all companies have to reconsider their possibilities. There is a concept - "the oil recovery factor." In different countries, it is naturally different. In Kazakhstan it is about 0.35, that is, of that oil that is in the reservoir, we can extract only 35%.
At the present time, research and development companies focused on increase of this index. This is something that can save us. At any case it is not worth tearing the hair out saying the we will run out of oil in 30 years. I can't voice the number, but at any case Kazakhstan may rely on production of oil and gas for a longer period of time.



- Thanks for the interview!