FSU OGM: BP axes Kazakh plans

UK major BP has scrapped plans for three oil projects in Kazakhstan after announcing a shift in its global strategy last year towards renewables.

Kazakhstan’s national oil company (NOC) KazMunayGas (KMG) published a letter sent by BP last October on March 10, stating that after 18 months of evaluation work it had decided not to pursue the Bolshoy Zhambyl, Zhemchuzhnaya and Kalamkas Sea blocks. BP agreed to assess the areas in May 2019, shortly before Royal Dutch Shell announced it would give up on plans to explore Kalamkas Sea and Khazar, the largest of several fields identified in the vicinity of the giant Kashagan oil project. It took the decision after concluding they were economically unfeasible.

BP pledged last year to scale back its oil and gas production by 40% over the next decade and increase investment in renewables tenfold. It also said it would not explore for oil in any countries where it is not currently active.

BP left Kazakhstan in 2009 when it sold its share of the Chevron-operated Tengiz field, which today is the Central Asian state’s biggest source of oil production, to Russia’s Lukoil. It also divested its share in the Caspian Pipeline Consortium that delivers Tengiz’s oil eastwards to markets.

Over in Russia, the court-arranged auction for the sale of the bankrupted Antipinsky oil refinery has been postponed from March 12 until March 31, following an appeal by one of the facility’s creditors.

Promsvyazbank requested that the sale be cancelled but fellow creditors Sberbank and SBK responded by petitioning that it proceed. The sale covers the 180,000 barrel per day (bpd) refinery itself and a share in the New Stream oil company that formerly controlled Antipinsky. The starting price for bids is RUB111bn ($1.5bn).

Antipinsky was once Russia’s biggest independent oil refinery but was closed in May 2019 after running out of cash to buy oil. The asset was transferred to Sberbank, which was owed RUB346bn by the plant.

Production resumed in July 2019, under a tolling scheme which involved the refinery processing oil that it bought from Sokar Energoresurs, a joint venture between Sberbank and Azerbaijan’s state-owned oil firm SOCAR that now owns an 80% stake in the refinery. But the refinery has no ownership rights to either the oil or the petroleum products it turns out, earning only enough to cover refining costs.

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