The continuing decline of Kazakhstan’s Kumkol North asset highlights the current picture of the country’s remaining marginal fields, as well as the fiscal stimulus associated with them, according to a new GlobalData report.
Entitled ‘Kazakhstan Kumkol North Project Panorama – Oil and Gas Upstream Analysis Report‘, the report outlines the existing circumstances of the country’s mature fields, where just one heavy oil project has managed to secure tax breaks from the authorities, while other such assets continue to falter.
The license of Kumkol North project is set to expire in the next five years prompting its operator, Lukoil, to expedite recovery of the remaining oil reserves. A 33% reduction in the export duty helped increase the field’s production life until 2021, with an expected recovery rate of 67.5% by the end of that period.
The field has also undergone testing of several advanced recovery techniques such as horizontal well drilling using multi-zone fracturing.
Measures were discussed during the peak of oil prices to provide relief to depleted fields or those with high watercut in the form of deductions to mineral extraction to boost complete development of these assets. Falling oil prices and bleak prospects of the oil and gas industry further the need for such incentives in order to continue production from mature assets.
The field remains of significance to both Lukoil and Kazakhstan as it represents one of the largest producing assets of the country. It is also among Lukoil’s earlier discovery of substantial size outside Russia that helped in the growth of its international operations.