«SOUTH-OIL» conducts oil exploration and production at several fields in the Kyzylorda region, and it has become one of the region’s largest and most reputable employers over the last 20 years. The close connection of production with science is a key priority of the company’s management, and over the company’s 20 years of operation, it has applied the most modern innovations several times, some of them for the first time in Kazakhstan.
After 20 years of operation, the company’s specialists, for the first time in the history of the country, discovered the oil and gas potential of the shale rocks of Karagansai formation. The Akshabulak field contains significant shale oil reserves. This is a new direction for the industry, and «SOUTH-OIL» has established itself as a leader in the exploration of oil-source rocks for shale oil production.
Shale oil is extracted from lower and more difficult-to-reach shale rocks. These rocks are mineral layers that are located beneath the layers where traditional oil and gas are produced. But, the qualitative properties of conventional and shale oil are not noticeably different.
The presence of shale oil in Kazakhstan has been known since the middle of the last century. However, because production technologies are extremely complex, its production has not yet been regulated. But conventional oil fields are being depleted, and «SOUTH-OIL» is connecting new technologies to increase production. This step will allow for a better understanding of the prospects for the development of unconventional reservoirs, as well as provide impetus for the development of a new direction and, as a result, an increase in oil and gas reserves. According to preliminary estimates, the Akshabulak field contains approximately 250 million tons of shale oil. Now that the technology is being tested, powerful pumps from Schlumberger and large Chinese companies are being purchased. A new chapter in the company’s history has begun. In this, the 20th anniversary year, it is appropriate to reflect on the path’s beginning.
Kenlyk was the first field in the company’s history. The tender was won in 1999, and the first contract for subsoil use was signed in 2001 with the Republic of Kazakhstan’s Ministry of Energy and Mineral Resources. In 2003, «SOUTH-OIL» started developing the first field, Kenlyk.
The 48 pioneers arrived at the field. Their work covered all angles at once. — Exploration, building of rotation villages, roads, and infrastructure. Near Kenlyk and Akshabulak field rotation villages, administrative complexes, landscaping, and infrastructure development appeared.
In August 2003, the company purchased more than 43% of JSC’s oil terminal shares. «Terenozekmunayonimderi», a Kyzylorda oil industry enterprise. In 2005, it obtained a quota for the transportation of approximately 150 thousand tons of oil per year via the Caspian Pipeline Consortium (CPC), and in 2006, it signed contracts for oil transportation via the CPC system, which is the main route for the export of Kazakh oil to global markets. Simultaneously, crude oil for refining is actively supplied on the domestic market.
In 2005, a young oil company acquires the industrial base of the former enterprise «Kyzylordasnab», where the Kyzylorda branch was established.
In 2006, «SOUTH-OIL» signed loan agreements with BNP Paribas (Switzerland), one of the world’s six largest banks.
In response to the Decree of the Government of the Republic of Kazakhstan “About the Ban on the Burning of Associated Gas,” the company began construction of a facility for the utilization of associated gas as well as a plant for the production of liquefied propane-butane and stabilization gasoline in 2007. The project’s estimated cost is 4.7 billion tenge.
In 2008, the Central Processing Facility (CPF) was commissioned. It prepares commercial oil from crude one. At the same time, the international firm DeGolyer & MacNaughton (USA) began an annual assessment of «SOUTH-OIL» oil reserves. The initial quota for oil transportation via the Kazakh-Chinese pipeline was 5,000 tons per month, which was later increased to 50,000 tons per month.
The next step is to commission a block-cluster pumping system in order to maintain reservoir pressure in wells and recycle process water.
In 2008, the company commissioned four gas turbine units of the PAES-2500 brand (mobile autonomous power plant).
A gas treatment plant with a capacity of 100 million m3 of raw petroleum gas per year was inaugurated in 2010. There are three types of products produced: 35.6 thousand tons of liquefied propane-butane per year, 7.6 thousand tons of stable gas gasoline per year, and 60 million m3 of dry gasoline gas per year.
In the same year, a commercial metering station for oil supplied to JSC «KTO» and LLP «KKT» main pipeline system was commissioned in Kenlyk field.
A Booster Pumping Station (BPS) and a Metering Station (MS) for oil pumping from wells in the contract territory to CPF were commissioned in 2012.
The company set itself the goal of producing 500 thousand tons of hydrocarbons per year. And the goal was quickly attained.
In 2005, nearly 124 thousand tons of oil were produced; in 2010, 583 thousand, with a profit of approximately $ 80 million. In 2014, 951 thousand tons of oil were produced. 923 thousand tons in 2015, 667 thousand tons in 2016, 530 thousand tons in 2017, 420 thousand tons in 2019, 444 thousand tons in 2020, 433 thousand tons in 2021, and 377 thousand tons in 2022.
The management of «SOUTH-OIL» outlined new frontiers to maximize the efficiency of oil production. So, if colleagues in the oil fields have an average well depth of 1500 meters, well depths in «SOUTH-OIL» reach 2700 meters. Oil deposits were discovered at depths of 4000-5000 meters in the Kumkol region, prompting the renewal of drilling rigs.
Increasing the oil recovery factor (ORF), or the coefficient of oil recovery, is a critical task. The use of innovative technologies that increase ORF while being environmentally friendly is the company’s long-term goal.
The most important task, of course, is shale oil production. The country’s parliament passed amendments to provide a legal foundation for the production and development of unconventional hydrocarbons such as shale oil. The purpose of the amendments is to allow companies—subsoil users—to begin studying unconventional reservoirs and, if successful, developing them. The amendments imply the consolidation of concepts relating to unconventional rocks that may contain shale oil or gas, as well as the development of instructions for calculating and classifying them.
«SOUTH-OIL» joined this effort, developed and approved the methodology for calculating reserves, and registered shale oil reserves in the State Register for the first time in independent Kazakhstan. After this problem is resolved, not only «SOUTH-OIL», but all interested companies and subsoil users will be able to survey using the methods and instructions developed. This is yet another significant contribution made by the company to the growth of the industry and the country as a whole.
