Chevron Corp., the No. 2 oil company in the US, the UK’s BG Group Plc and a group led by Italy’s Eni SpA, are targeting Kazakhstan, the second-largest oil producer in the former Soviet Union. The Kazakh government, which had planned to lift annual output to at least 150 million tons (3 million barrels a day) by 2015, now wants to raise standards of environmental protection.  „It won’t be a tragedy if in 2015 we extract” less than the target, Ural Mukhamedzhanov, the chairman of the Kazakh lower chamber of parliament, said late yesterday in an interview in London. „I would even curb some projects for the sake of the ecological balance.”

Kazakhstan has secured about $70 billion in foreign investment since the demise of the Soviet Union, with the majority spent on oil projects. The nation, which owns the biggest oil reserves in the Caspian Sea region, is developing a so-called Green Oil program, which will require producers to meet international standards of environmental protection. TengizChevroil LLP, the local Chevron-led venture, last year had 98 unspecified incidents and had to flare 290 million cubic meters of gas above limits, Mukhamedzhanov said. In addition, the producer accumulated about 9 million tons of sulfur stored openly at the operations area, further polluting the environment, he said.

„It’s very important not to extract by all means but with the use of new technologies,” Mukhamedzhanov said. Environmental protection „is going to be one of the most important priorities for Kazakhstan.” TengizChevroil, the country’s biggest oil exporter, last August rejected reports that the company had breached the environmental conditions of its operating license. The venture plans to raise crude output 19% to 15.9 million metric tons this year, Antonio Palmeirim, a spokesman for the unit, said on January 24. Palmeirim, Maria Karazhigitova and Svetlana Kairgaliyeva, spokeswomen at TengizChevroil, weren’t immediately available at their Atyrau, Kazakhstan-based office today. Palmeirim and Karazhigitova weren’t available on their cell phones. PetroKazakhstan Inc., a local unit of China National Petroleum Corp., cut oil production 30% in 2005 after the Kazakh government banned flaring of gas extracted with crude.

 
Kazakhstan probably won’t increase oil production this year, Amantai Suyesinov, a deputy energy minister, said on January 10. Output of crude oil and gas condensate is expected to remain at about the 65 million metric ton-level this year, after rising about 5% last year. The Eni-led venture developing the Kashagan oil field, Kazakhstan’s largest, won’t start production until 2010, about two years later than it had expected, Kazakh Energy Minister Baktykozha Izmukhambetov said February 16. The Kashagan field, the world’s biggest oil discovery for 30 years, won’t begin extraction possibly until as late as 2012, according to the median estimate of seven analysts surveyed by Bloomberg News last month. The total cost of the project will be $40 billion, or 38% above the budget Eni outlined three years ago, the analysts said.

Kazakh Prime Minister Danial Akhmetov in November said delays in Caspian Sea oil projects may threaten economic forecasts and the plan to triple output of the fuel by 2015. BG, the UK’s third-largest gas producer, last month said Kazakhstan’s Karachaganak gas condensate field will be able to export 15.4 million tons of oil a year to western markets in 2012, up from current capacity of 9 million tons. (Bloomberg)