Karachaganak Field

Karachaganak
Region	Pre-Caspian Basin
Offshore/onshore	onshore
Operators	BG Group Eni
Partners	BG Group Eni Lukoil Chevron
Field history
Discovery	1979
Start of production	1984
Peak year	2012 (estimated)
Abandonment	2040+ (estimated)
Production
Current production of oil	200,000 barrels per day (~1.0×10^7 t/a)
Current production of gas	650×10^6 cu ft/d (18×10^6 m3/d)
Estimated gas in place	1,371×10^9 m3 (48.4×10^12 cu ft)
Producing formations	Carboniferous Permian Devonian

Karachaganak Field is a gas condensate field in Kazakhstan. It is located about 150 km east from the city of Oral (Uralsk) in the northwest of Kazakhstan. The field was once a massive Permian and Carboniferous reef complex covering an area 30 by 15 square kilometres (11.6 by 5.8 sq mi). At its largest point the reservoir contains a gas column 1,450 metres (4,760 ft) deep with a 200 metres (660 ft) deep oil rim below it. It is estimated to contain 1.2 trillion cubic metres (42 trillion cubic feet) of gas and one billion tonnes of liquid condensate and crude oil. Discovered in 1979, it began production under Karachaganckgazprom, a subsidiary of the Russian Gas Company Gazprom. Kazakhgas took over operatorship after the independence of Kazakhstan in 1992. in 1992 AGIP (now Eni) and the then British Gas (now BG Group) were awarded the sole negotiating rights, forming a partnership company. In 1997 Texaco (now Chevron Corporation) and Lukoil signed a production sharing agreement with the original two companies and the Kazakhstan Government. This is a 40-year agreement to develop the field to allow the production to reach world markets. This is done under a partnership company known as Karachaganak Petroleum Operating (KPO) where BG Group and ENI are joint operators with a 32.5% stake each in the company, with Chevron and Lukoil owning 20% and 15% respectively.

History

Located in the Uralsk Region of West Kazakhstan. It was discovered in 1979 by a well drilled to investigate a structural high detected during a reinterpretation of 2D seismic shot between 1970 and 1971. Production began in 1984 under the operatorship of Karachaganakgazprom. Limited quantities of gas and condensate were exported to Russia via pipelines and to the processing facilities at Orenburg. On 3 October 2006 Kazakhstan and Russia signed an agreement to create a joint venture on the basis of Orenburg gas processing plant for processing gas from the Karachaganak field.

Phase 1

This began with three wells penetrating into the Permian formations of the reservoir. Once produced to surface the gas and oil were separated before being piped to Orenburg where further processing was undertaken. This was partially due to the sour nature of the gas, with a hydrogen sulphide content of 3.5-5% and carbon dioxide content of 5%. Karachaganckgazprom also maintained a policy of full gas voidage replacement to maintain pressure of the reservoir above the dew point. By 1990, approximately 200 vertical wells had been drilled in Karachaganak reaching a peak production plateau of 155 million cubic feet (4.4 million cubic metres) per year of gas and 100,000 barrels per day (16,000 m³/d) of oil, before beginning to decline in 1992.

Phase 2

Beginning in 2000 under the operatership of Karachaganak Petroleum Operating(KPO), the field went under a redevelopment program. This involved an investment of over US$1 billion dollars into the construction and enhancement of existing facilities, new gas and liquid processing and gas injection facilities, a workover program consisting of 100 existing wells, a 120 MW power station for the facilities, and connection to the Caspian Pipeline Consortium via a 650-kilometre (400 mi) line to Atyrau. This phase was officially completed in 2004, allowing for the production handling of 700 million cubic feet (20×10^⁶ m³) per day of gas and 200,000 barrels per day (32,000 m³/d) of oil.

Reservoir properties

Reservoir pressure	Reservoir temperature	Reservoir porosity	Net/gross ratio	Water saturation	Density of condensate	Average permeability	Top of structure	Gas-oil contact	Oil-water contact
52–59 MPa	70 to 95 °C	9%	40%	10%	47 °API (790 kg/m³)	2 mD (2 µm²) with high perm streaks

Production

In January - June 2005, 6.4 billion cubic metres (230×10^⁹ cu ft) of gas was recovered, and 5.7 million tons of liquid hydrocarbons was produced.

Overall, it is planned to recover about 300 million tons of liquid hydrocarbons and 800 billion cubic metres (28×10^¹² cu ft) natural gas during the contract period.

One current production issue facing the field is the increasing amount of gas of which a large amount is sour. As the export facilities of the project are not fully developed most of this gas is being recycled back into the reservoir until it can be exported profitably.

Field reserves

It is estimated that the Karachaganak field contains 1.236 billion tonnes of liquids and 1.371 trillion cubic metres (48.4×10^¹² cu ft) of natural gas in place (17.78 billion barrels (2.827×10^⁹ m³) of oil equivalent).

Geology

The Karachaganak Field is one of the world's largest gas condensate fields. It is located in the Pre-Caspian (or North Caspian) Basin, which extends from the southeastern margin of the Russian Platform down to the northern coast of the Caspian Sea, and includes the offshore Caspian Sea north of about 44° N. The North Caspian is a pericratonic depression of Late Proterozoic-Early Paleozoic age. Sediments in the 500,000-square-kilometre (190,000 sq mi) basin are up to 22 kilometres (14 mi) thick in places. The basin is subdivided into numerous zones by large salt domes, and the primary salt layer, the Permian Kungurian salt, separates strata vertically into subsalt and suprasalt layers. The basin is bounded to the east by the Hercynian Ural Mountains and to the southeast and south by other orogenic belts. In the north, the basin lies on the flank of the Voronezh Massif in the west and the Volga-Ural Platform in the north. Numerous oil and gas fields have been discovered in this region in addition to Karachaganak, such as Astrakhan, Tengiz and Zhanazhol Fields.

The field consists of a heterogeneous carbonate massif with strata from three geologic periods and numerous stages of deposition during these periods. The following have been identified:

Permian: Kungurian, Artinskian, Sakmarian, Asselian

Carboniferous: Serpukhovian, Visean, Tournaisian

Devonian: Famennian

The depositional setting of the field is also varied. On the basis of core sample analysis and seismic studies the following depositional settings have been identified: limestone, talus, normal marine, shallow marine, inner reef lagoon, reef core, relatively deep water, slope and anhydrite.

The variation of deposition is due to the long period over which the Karachaganak structure was formed. From the Late Devonian to the middle Carboniferous the field was an atoll, over which in the early Permian a system of reefs were built. At its greatest the reservoir is 1.5 km thick. This type of reservoir structure has been seen in analogous fileds including Kenkiyak, Zhanazhol, Tengiz, and possibly Astrakhan fields. A west-east cross section through Karachaganak resembles the twin humps of a camel, indicating two separate reef highs.

Likewise the large variation of deposition has led to four different types of carbonate cores in the structure: biothermal, biomorphic detrital, organo-clastic, and biochemogenic. Of these biomorphic detrital are the most common followed by biothermal rock types. However estimates of their volumes range from 30-90% for the former and 10-60% for the latter.

Oil and gas migration

As with other reservoirs in the North Caspian (Pricaspian) Basin, it is thought that the Karachaganak reservoir was filled over multiple stages, the first of which began during late Paleozoic time with the formation of oil pools. As the basin began to subside, gas was generated and migrated to the traps. The gassiness of the reservoirs is determined by their location in the basin. Northern reservoirs tend to be wet; the southwest part of the basin is more gas prone than the east and southeast.

Berezovka Controversy

Since 2002, residents from the village located closest to the Karachaganak Field have been campaigning for relocation and compensation. The villagers, led by the local organization Zhasil Dala (Green Steppe), maintain that they are suffering a host of illnesses and environmental degradation due to exposure to toxic emissions from the Karachaganak Field, situated five kilometers away.

Independent Bucket Brigade air monitoring conducted by the villagers from September 2004-August 2005 registered more than 25 toxic substances in the air, including hydrogen sulfide, methylene chloride, carbon disulfide, toluene and acrylonitrile. In 2005, Karachaganak’s regional environmental authority temporarily revoked the operating license of KPO B.V. due to environmental violations, including emitting 56 thousand tons of toxic waste in the atmosphere in 2004, improper storage of toxic solid waste on the field, and dumping toxic effluent into the water table. The consortium was found to have dumped an excess of waste in 2008, resulting in a $21 million fine in early 2010.

The villagers contend that they should have been relocated upon the start of field operations as Kazakhstani law stipulates a five-kilometer Sanitary Protection Zone (SPZ) around the field. However, in 2003, the government reduced the SPZ to three kilometers, effectively barring the villagers from relocation. After three years of protest from the villagers, Kazakhstan’s Public Prosecutor found the 2003 decision to reduce the SPZ to be illegal, and the five-kilometer SPZ was reinstated in 2006. However, the village has not been relocated.

In 2002, the private sector arm of the World Bank Group, the International Finance Corporation (IFC), provided $150 million in loans to Lukoil for development of the Karachaganak Field. These loans were repaid by Lukoil in January 2009. From 2004-2008, three complaints were filed with the IFC’s Compliance, Advisor/Ombudsman’s office regarding the IFC’s violations of its own environmental standards in financing the Karachaganak Field. One of the complaints results in a report by the Auditor, published in April 2008, which documented numerous non-compliances with IFC standards at Karachaganak. One of the revelations was that no results for hydrogen sulfide monitoring had been reported between 2003 and 2006—years during which the Berezovka residents maintain they were suffering health problems due to hydrogen sulfide exposure.

Zhasil Dala works in partnership on this campaign with the US-based environmental justice organization Crude Accountability and the Kazakhstani Ecological Society Green Salvation, among others.

See also

• Kazakhstan
• KAZENERGY Eurasian Forum
• Natural gas
• Natural gas processing
• Natural gas condensate
• Oil and gas basins of Kazakhstan

References

• Kazakhstan's Gas: Export Markets and Export Routes, by Shamil Midkhatovich Yenikeyeff, Oxford Institute for Energy Studies, November 2008
• "The Giant Karachaganak Field, Unlocking its Potential" (PDF). Schlumberger Oil Field Review. Retrieved March 25, 2006.
• "Developing Coiled-Tubing Techniques on the Karachaganak Field, Kazakhstan". SPE Paper Absract. Retrieved March 25, 2006.
• "KPO Operations". KPO Corporate website. Retrieved March 25, 2006.
• "Kazakhstan". BG Group. Retrieved October 9, 2010.
• "Geology and Petroleum Potential of Central Asia". Rice University. Archived from the original on February 17, 2006. Retrieved March 25, 2006.
• "Internet Geology Newsletter No 192". James Clarke. Archived from the original on 2004-01-25. Retrieved March 25, 2006.
• "Reservoir Geology of the Karachaganak Field". A. Giovannelli. Retrieved April 24, 2006.

External links

• Karachaganak Petroleum Operating Homepage
• BG Group - Kazakhstan
• ENI - Kazakhstan
• Chevron - Eurasia
• Lukoil - International Exploration
• Caspian Pipeline Consortium
• Crude Accountability
• Green Salvation
• Karachaganak and the Future of Petrochemical Industry in Kazakhstan