Khvalynskoye Oil and Gas Field, International

Khvalynskoye oil and gas project is located in the northern part of the Caspian Sea. The project field is about 260km from Astrakhan in Kazakhstan and lies at a sea depth of 25m to 30m. It is a conventional gas condensate field.

The project is being developed jointly by Lukoil and KazMunaiGaz National Company (KMG). Lukoil is the operator of the project, with 50% control. The gas produced will be transported to Russia.

Under the agreement between Russia and Kazakhstan to develop hydrocarbon resources jointly, Lukoil and KMG formed a joint venture in 2005 to develop the Khvalynskoye field.

Total entered into an agreement with KMG to develop the Khvalynskoye field in October 2009. Under the agreement Total and GDF-Suez will take over a 25% share (Total 17% and GDF 8%) from KMG's initial 50% stake.

The first phase of the project development will cost $5bn. Total and GDF will spend about $1bn on the project. The field is expected to be producing around 9 billion m³/year of gas by 2016.

Geology and reserves

The geology of the field is formed of gas, condensate and oil reserves in the lower Cretaceous and upper Jurassic deposits. The Ministry of Natural Resources Central Committee of Russia approved oil and gas resources – natural gas 322 billion m³, condensate 17mt and oil 36mt – in 2005.

The field is composed of C1+C2 reserves of 127 billion m³ of gas and 9.6mm tons of condensate, and C3 reserves of 207mm tons standard fuel equivalent as indicated by an audit by Miller and Lents in 2004.

Drilling

Two exploratory wells, Khvalynskaya-1 and Khvalynskaya-3, were drilled at the field. The construction of Khvalynskaya-1 started in July 1999 and the well was drilled to a depth of 4,200m. While drilling, ten promising oil and gas reservoirs were discovered. The maximum flow rate while testing amounted to 850,000m³ of gas and 80m³ of condensate per day.

The field comes under Severny Licence area. Construction of the first well in the Severny Licence area was completed in 2000.

The Astra jack-up rig was used to construct the well. The rig has three 67m-long legs. The rig can drill to vertical sea depths of 45m and well depth to 5,000m.

Drilling at Khvalynskaya-3 was completed at a depth of 4,338m. The maximum flow rate while testing amounted to 350m³ of oil and 154,000m³ of gas per day. Oil with particular gravity of 0.863 g/cm³ contains high paraffin content.

History

The Republic of Kazakhstan and the Russian Federation entered into an agreement to jointly develop hydrocarbon resources in 1989. Major geological and environmental surveys were held in the Severny Licence area by the operator and contracts of about $120m were signed in 1999 to develop the project.

Under a government resolution passed in May 2002 KMG was chosen as the authorised Kazakhstan organisation for exploration and development of Khvalynskaya field's hydrocarbon reserves.

KMG signed a deal with Lukoil in 2003 to jointly develop the Khvalynskoye oil and gas project. The contract also covered transportation and the sale of hydrocarbons and refinery products. The joint venture was formed in 2005.

Seismic survey

Lukoil began large-scale geological and geophysical exploration of the northern and middle Caspian in 1995. The 3D seismic surveys work covered more than 63,000km² of the Russian sector of the Caspian Sea. The project oil field was discovered in 2000 and opened in 2002.

The 3D seismic survey was completed by mid-2005 with the drilling of two prospective wells. During the survey five deposits were identified, consisting of four gas condensate and one oil.