KAZAKHSTAN RECEIVING ACREAGE APPLICATIONS

A Look at Kazakhstan's Sedimentary Basins, Hydrocarbon Potential (24889 bytes)

Kazakhstan is receiving applications for exploration and development rights to large tracts in the central and eastern parts of the republic.

The program is part of a countrywide effort to attract more foreign investors to help underwrite massive industrial privatization aimed at revitalizing Kazakhstan's economy.

Kazakh government agencies have been discussing with foreign companies the oil and gas potential of 12 sedimentary basins outside traditional producing regions in western Kazakhstan. Kazakhstan officially began accepting applications Dec. 3 for acreage.

After several months of direct negotiations between the government and operators, a competitive tender is to be announced in spring 1995.

A delegation of Kazakh officials led by Vice Pres. Yerik M. Asanbaev visited Houston the last week in November to publicize petroleum opportunities in the republic and appeared Dec. 1-2 at a conference to present an overview of Kazakhstan's petroleum prospectivity. Officials also reviewed recently approved legal, financial, and environmental legislation intended to improve the attractiveness of investing in Kazakhstan's energy sector.

Kazakh oil and gas officials specifically discussed sparse hydrocarbon records of the northern South Torgay and Teniz basins in East Central Kazakhstan. S.Z. Daukeey, head of Kazakhstan's geology and underground resources preservation ministry (Mingeo), said the two regions were chosen because of their good prospects.

Mingeo's geological information administration is set up to issue certificates giving foreign companies access to packages of data collected by the state or under a commercial agreement with the state. Data packages on the Teniz and northern South Torgay basins are available for $30,000 and $50,000, respectively.

Mingeo at the end of the Houston meeting named Landmark Graphics Corp., Houston, preferred consultant and "provider of information technology supporting development of Kazakhstan's natural resources." Plans call for Landmark to open electronic data rooms for the ministry in Houston and London where companies may review information.

STATUS OF DEVELOPMENT

Acreage in eastern and central Kazakhstan is to be assigned based on a system of rectangular tracts with boundaries of 20 min latitude by 30 min longitude across the entire republic. Each tract's area varies from 1,269 to 1,489 sq km, depending on its latitudinal position.

Despite the size of available tracts, officials said East Central Kazakhstan's highly complex geology limits the size of likely hydrocarbon reservoirs, leaving prospects of interest mainly to independent operators.

Geological minister Daukeey said upstream deals in East Central Kazakhstan may take the form of concessions, production sharing agreements, or joint ventures, but the latter is preferred. All are possible through direct negotiations or competitive tenders.

Fees, bonuses, work programs, minimum spending, and other terms and requirements of upstream deals all are to be comparable, no matter which form is taken by an exploration and development contract. Terms of existing upstream agreements are not to change because of current licensing programs.

Jerzy B. Maciolek, GeoInfo Consultants, Houston, said about 66% of Kazakhstan's 2.9 million sq km surface area is underlain by sedimentary basins with hydrocarbon potential, including about 700,000 sq km of petroleum bearing acreage in the west and 1.1 million sq km in the east.

However, most oil and gas development in Kazakhstan occurred while the republic was part of the former Soviet Union and was subject to Soviet central planning. As a result, oil and gas infrastructure was not developed based on Kazakhstan's economic needs.

For example, fields in western Kazakhstan produce about 190 million bbl/year of oil and in eastern Kazakhstan about 10 million bbl/year. Meantime, refining capacity amounts to about 100 million bbl/year in western Kazakhstan and 34 million bbl/year in the east. Most of Kazakhstan's industry is concentrated in the eastern part of the republic.

Similarly, western Kazakhstan boasts proved oil reserves of 20.2 billion bbl in about 60 fields, while oil reserves in the eastern half of the republic amount to only about 1 billion bbl in Kumkol field. Kazakhstan's oil resources are estimated at 55.5 billion bbl in the west and 30.7 billion bbl in the east. Proved gas reserves are distributed even more unevenly, with about 86.2 tcf estimated in the west and 2.1 tcf in the east.

GEOLOGIC OVERVIEW

Maciolek said more than 20 large potential petroleum bearing subbasins have been detected among the 12 large sedimentary basins in central and eastern Kazakhstan.

Prospective areas occur in four main geologic provinces: West Siberian platform, Turan platform, Kazakhstan massif, and Alpine deformation front.

The Teniz and Chu-Sarysu basins are massive intermontane, petroleum rich grabens 5,000-8,000 m deep on Kazakhstan's West Siberian platform. The South Torgay, Syr-Daria, and Aral basins are associated with the Turan platform and along Kazakhstan's southern border within the Alpine deformation front.

Generally, the southern Turan-Alpine front basins have filled northern Kazakhstan basin, also on the West Siberian platform, and other southeastern basins with Mesozoic-Cenozoic sediment. Paleozoic sediment fills the Teniz, Syr-Daria, and Chu-Sarysu basins, except for central Syr-Daria and southern Chu-Sarysu, which contain Jurassic-Neogene sediment. The South Torgay and Aral basins contain Triassic-Jurassic sediment, also within deep, narrow grabens.

Until the chance discovery of Kumkol field in 1984 triggered a series of later finds, South Torgay was considered non-prospective. Even today, despite collection of about 16,000 km of seismic data and numerous oil and gas shows in 10 wells in the northern 70,000 sq km of South Torgay, the basin has not yielded a commercial oil or gas discovery.

Geophysical information on the Teniz basin amounts to 7,000 km of single fold seismic data and 1,300 km of common depth point profiles. Most of the 20 wells drilled in the basin did not penetrate primary objectives.

SOUTH TORGAY HIGHLIGHTS

A.S. Nazhmetdinov, head of the oil and gas ecology and geophysics department of the Scientific & Production Association of Kazakhstan, described the South Torgay basin as a rift controlled 500 km by 150-200 km area in Central Kazakhstan characterized by Jurassic sedimentary source beds as thick as 3,000 m.

The basin contains a series of 50-150 km by 20 km grabens with prerifting rocks at depths ranging from 3,000 to 6,000 m along graben axes to 1,0001,500 m deep on intervening horsts. Reservoir rocks in the region with porosity as great as 30% occur in middle to upper Jurassic and lower Cretaceous strata, with the latter in some places acting as seals. Tests of pre-Jurassic rocks have found scattered shows of hydrocarbons.

Nazhmetdinov said oil generation in the basin is believed to have occurred where Jurassic sediments are buried at relatively shallow depths. Gas/condensate is thought to have been generated where Jurassic burial is deeper.

With 13 fields discovered within its boundaries since discovery of Kumkol, South Torgay is expected to become one of Kazakhstan's leading petroleum producing regions. Yet Kumkol still is the only field on production in the basin, and most of the northern part of the basin remains undrilled.

Development is to begin in 1995 of a gas field discovered in 1985 by Canadian Occidental and partners in South Torgay's Aryskum subgraben, where 25,000 km of seismic data have been collected and 220 test wells drilled, each to a depth of about 1,900 m.

TENIZ GEOLOGY

The Teniz basin is an oval, intermontane, upper Paleozoic graben with an area of about 75,000 sq km that developed in the Caledonian Ural-Mongolian fold belt.

Nazhmetdinov said the basin is bounded naturally by fold belt features: the Kokchetav uplift on the north, Ulutay Mountains on the southwest, and Erementay Mountains on the east. The basin adjoins the Karaganda basin through the Kipshak graben and is closed on the southern flank by the Sarysu-Teniz horst.

The oldest rocks in the Tengiz graben are Ordovician tuffs, conglomerates, and marls 1,500-3,000 m thick, overlain unconformably by about 2,000 m of Silurian volcanic-terrigenic strata. Deposits of lower Devonian volcanic and sedimentary conglomerates, tuffaceous sands, tuffs, and coarse breccias form the basin's Caledonian basement.

Middle Devonian strata consisting of variegated sands, gravels, conglomerates with carbonate inclusions, and marls reach thicknesses as great as 3,000 m in the basin. Upper Devonian formations 1,500 2,000 m thick laid down during the Famennian account for some of the basin's most prospective hydrocarbon strata.

Exploration in the basin halted after the 1950s, although many scientific reports in recent years recommended resumption of activity.

Nazhmetdinov said state crews drilled a few nonhydrocarbon wells to 200-1,000 m and several deeper stratigraphic tests with about 20 geological objectives, the deepest P-1 well to 3,002 m. Among them, methane flowed for about 30 hr from a Middle Carboniferous interval penetrated at 812 m by the 0-15 well.

However, none of the boreholes penetrated the most promising Famennian-Tournaisian carbonate zones, known from studies of outcrops on the flanks of the graben that found Tournaisian reef, Famennian rocks with high bitumen contents, and hydrocarbon odor in fractures.

Nazhmetdinov said analyses of data have built a list of subsurface characteristics showing strong hydrocarbon potential in the Teniz graben, including adequate source, reservoir, and seal rocks, trapping mechanisms, traces of migrating bitumens, a stable geothermal and tectonic environment, and analogs with the Chu-Sarysu and Karaganda grabens.