Geological Risk on the Shelf of Kazakhstan Has Materialized
LUKOIL and KazMunayGas did not find oil in the Zhenis area.
KazMunayGas did not find any hydrocarbons while drilling an exploration well within the framework of the Zhenis project on the shelf of Kazakhstan. However, the results of the work helped to clarify information about the structure of the subsoil within this sedimentary basin. The Devon news agency learned about this from a message from the press service of KMG. The Kazakh national company will adjust the strategy for further geological prospecting for other projects.
“Drilling an exploration well at the Zhenis structure confirmed that the trap was not filled with hydrocarbons,” KazMunayGas said. – The geological risk has materialized. The probability of success at the time of the assessment and the start of the project was 20%.”
“There is always a risk of discovering hydrocarbon reserves as a result of drilling wells below the expected level, or even getting a “dry” well,” the statement says. “According to global statistics, a success rate of 20-30% is considered good for taking this risk and starting investment in exploration.”
In order to carry out exploration work and clarify the prospects of the site, LUKOIL investments were attracted through the mechanisms of carry financing. According to this type of contract, 100% of investments are attracted from the partner at the stage of exploration. These costs should be compensated already at the stage of future production. In case of failure of geological exploration, these costs are not reimbursed, KMG explains.
Zhenis is an offshore oil and gas exploration project. It is implemented by Zhenis Operating (operator) and Lukoil Kazakhstan Upstream.
