KAZeneRGY - 10 YeARs olD!

МҰНАЙШЫ      

Қыркүйек 2015

61

in Kazakhstan, and recommendations for 

the Kazakhstan authorities.

KAZENERGY is currently working 

on upgrading oil and gas industry 

standardization.

A lot of work has been done around 

legislation and taxation. For example, we 

have been involved in drawing up a concept 

for a Draft Subsoil and Subsoil Use code. 

In July, it was approved by the relevant 

inter-departmental commission. The 

Subsoil Use code is being developed by the 

Ministry of Investments and Development 

upon the task given by the Head of State. 

PetroKazakhstan lawyers, as part of an 

expert advisory council have actively 

participated in drafting the new code.

Working on a project to amend the 

Kazakhstan Tax code, in 2014 we received 

and reviewed 87 proposals and amendments 

from Association members, of which 

21 were sent to the Ministry of National 

Economy on behalf of KAZENERGY. After 

Mazhilis and Senate consideration, eight 

KAZENERGY member amendments were 

added to the draft. In 2015, the working 

group added another five Association 

member amendments to the comparison 

table.

Together with representatives from the 

ministries of national economy, finance 

and energy and KazMunaiGas, we created 

a working group to work on reducing the 

tax burden on Kazakhstan subsoil users and 

analysed the current situation and planned 

actions for 2015. As subsoil user revenue 

forecasts in 2015 are low, we have been 

working on draft amendments to the Tax 

code and other legislative acts to introduce 

a mechanism to offset export customs duty 

against export rent tax, various scenarios for 

linking export customs duty rates to global 

oil prices. Proposals have been made to 

amend government resolutions to simplify 

the procedure for classifying fields as low 

yield and receiving mineral resource tax 

breaks.

KAZENERGY is a part of two Ministry 

of Energy ecological working groups, the 

results of which have so far been a draft law 

amending ecological legislation.

We have also reached an agreement with 

the Ministry of Energy to review the method 

for calculating indirect damages from 

environmental pollution. Another issue we 

have been trying to resolve is the duplication 

of subsoil user liability for excess emissions 

in administrative and tax legislation.

We are working on a number of issues 

covering ecological monitoring and 

baseline ecological research during oil 

operations in the Kazakhstan sector of the 

caspian Sea; the reduction of greenhouse 

gas emissions, including drafting a national 

plan and creating a system to allocate 

greenhouse emission quotas and others.

As part of our role in the coordinating 

council for human resource development, 

we have drafted a list of oil and gas sector 

professions to be used in recording the 

composition and allocation of staff by 

category, and developing professional 

standards to be used as the basis for training 

specialists and certifying staff.

We have also carried out a review of oil and 

gas industry corporate responsibility. This is 

the first time that the contribution of the oil 

and gas industry has been assessed in terms 

of national socio-economic development. 

The research highlights key results in 

social responsibility and examples of best 

practices; assesses contributions to socio-

economic development in Kazakhstan; 

quotes the opinions of industry leaders 

and provides recommendations on how 

to improve social responsibility. Thanks 

to the review, oil and gas companies now 

have access to more effective dialogue with 

interested parties, can ensure management 

focuses on social awareness, and are able to 

compare own activities with other practices.

KAZENERGY is working on developing 

a training programme to provide grants 

to university students and post-graduates, 

college students, teachers and vocational 

training tutors in core specialities. In 2013-

2014 alone, 92 students and teachers 

received KAZENERGY grants. The total 

amount allocated and paid out annually 

exceeds KZT 20 million.

- Helping KAZENERGY member 

companies is one of your tasks. How 

has working with KAZENERGY helped 

its members? Tell us a little about how 

it has helped companies to resolve 

their issues.

- We are constantly asked by Association 

members to resolve a whole range of issues. 

We see each request through to the end. 

In addition, once a year, we hold regional 

sessions for Association members.

For example, we facilitated the review 

of the Karazhanbasmunai subsoil use 

contract where the Karazhanbas field 

had been included in a list of low-profit, 

high-viscosity, saturated, low-yield and 

abandoned hydrocarbon fields, approved 

by Government Resolution № 673 dated 

18 June 2014. Those actions will ensure a 

reduction in hydrocarbon production costs.

At the request of NcOc, we sent a request 

to the General Prosecutor regarding the 

requirement to enter into a separate subsoil 

contract to inject drilling mud generated 

by drilling production wells. We organised 

and held meetings between the two parties, 

which resulted in the General Prosecutor 

sending a response to NcOc that satisfied 

the company’s interests.

We helped draft a Government 

Resolution exempting Karachaganak, 

North-caspian and Tengiz subsoil users 

as well as their operators, contractors and 

subcontractors from having to guarantee 

a fixed ratio of Kazakhstan employees to 

overseas employees until 1 January 2017, 

provided they introduce programmes to 

increase local staff content.

- One of KAZENERGY’s goals is to 

improve the investment climate 

in Kazakhstan. Tell us what steps 

KAZENERGY has taken to improve the 

country’s image in the international 

oil and gas arena?

- We work on improving the investment 

climate predominantly from within. As I 

mentioned earlier, a robust legislative basis 

is being drawn up and work is being done on 

қР Энергетиканың бірінші вице-министрі Ұ.қарабалин мырза, Тотт мырза, Марабаев мырза мен Мағауов мырза және 

KAZENERGY медальдарымен марапатталған Миллер мырза мен Ратти мырза, 2014 - ДМК / Первый вице-министр энер-

гетики РК  г-н Карабалин, г-н Тотт, г-н Марабаев и г-н Магауов с награжденными медалями KAZENERGY г-ном Милле-

ром и г-ном Ратти на ВНК-2014 / RK First Vice Minister of Energy Mr.Karabalin, Mr.Toth, Mr.Marabayev and Mr.Magauov with 

KAZENERGY medals recipients Mr.Miller and Mr.Ratti at the WPc-2014

62

Қыркүйек 2015      

МҰНАЙШЫ

a Subsoil Use code. We are also developing a 

taxation system for investment projects.

We have tried to take an active role in 

global oil and gas events. KAZENERGY is a 

member of the World Petroleum council, 

which gives us access to information 

on innovative technology; enables us 

to receive expert review for projects, 

promote Kazakhstan products and services 

internationally, and create a positive image 

for the Kazakhstan’s oil, gas and energy 

industry. In addition, we recently signed 

a memorandum of cooperation with 

the International Energy Agency and the 

International Renewable Energy Agency. 

This is how we have secured our intentions 

to develop the industry together. In 2010, 

KAZENERGY signed a Global Partnership 

Treaty with the World Energy council, which 

has meant we have been able to participate 

directly in global research and technical 

projects, and in the council’s regional 

activities, where, representing Kazakhstan’s 

interests, the Association contributes to the 

development of global energy policy.

As part of our role on the National 

Extractive Industries Transparency Initiative 

(EITI) council, we represent the interests of 

oil and gas sector companies.

KAZENERGY is also working body 

representing Kazakhstan in the International 

Energy charter. Last year, we hosted 

International Energy charter representatives 

at the 25th session of the Energy charter 

conference, overseeing the signing of the 

Astana Declaration, which defines strategic 

directions for the development of the Energy 

charter in the next five years.

International integration is the first step 

on the road to being recognised by global 

community. By participating in various 

international events, we get to adopt the 

experience and understand the requirements 

of the global community for an industry that 

demands investment. Our efforts are focused 

on creating a stable and positive image for a 

country that is open to investment.

- What will be the focus of the 

upcoming KAZENERGY forum?

- The current situation for global energy 

is not simple, which is why this year’s theme 

will be reality: transformation of the energy 

markets, changes in its architecture, the 

geographical shift of energy consumers 

and suppliers, the slowdown in economic 

growth, and, of course, oil prices. We will 

be discussing all of these issues at the 10th 

KAZENERGY Eurasian Forum. In the last 

decade, the Forum has grown noticeably, 

as has interest in it. We are improving the 

way we work year on year and trying to 

maintain the level of speaker quality. The 

Kazakhstan Prime Minister and ministers 

always attend, and this year we are expecting 

some impressive overseas speakers, such 

as the Vice chairman of IHS, Pulitzer Prize 

Winner for the book 'The Prize: The Epic 

Quest for Oil, Money, and Power’ Daniel 

Yergin; Special Representative of the UN 

Secretary General and General Director 

of the Initiative for Sustainable Energy for 

All (SE4All) Dr Kandeh Yumkella; General 

Director of the International Renewable 

Energy Agency Adnan Amin; President of 

the World Petroleum council Jozsef Toth; 

Secretary General of the Energy charter 

Urban Rusnak; Senior Vice-President of 

ExxonMobil Mark W. Albers and others.

- In addition to the annual 

KAZENERGY Forum, you also have a 

Youth Forum and a Women’s Energy 

Club. Can you give us some details 

about them?

- They are traditionally part of the 

KAZENERGY Forum. In developing the 

industry, we should not be forgetting about 

the next generation who need to learn from 

our experience. The Forum is ideally suited 

to this and this is why it holds a number of 

master classes, round tables with notable 

energy industry representatives, not only 

from Kazakhstan, but also from overseas. We 

will be holding our second “Innovation Man” 

contests at the Youth Forum to develop 

innovative projects for the petrochemical, 

atomic, oil and gas, and energy industries. 

The winners receive a grant for an MBA at 

the Nazarbayev University, KBTU, and a 5 

million rouble grant from the Skolkovo Fund, 

which is a partner of the contest. The Youth 

committee is also involved in campaigns 

to provide material aid to war veterans, 

orphanages and handicapped people.

The goal of the Woman’s Energy club 

is to unite women from industry, the state 

authorities, international organisations and 

public figures to discuss and find the best 

solutions to socio-economic, legal, gender 

and other issues related to the development 

of the oil, gas and energy sectors, and to 

define the role of women in the energy 

industry in the future.

- What are the Association’s goals 

and objectives over the next five years? 

What, in your opinion, still needs to be 

improved in the Kazakhstan oil and gas 

industry to reach its ideal? And what is 

that ideal?

- In the short term, we want to realise our 

approved target projects for this year. After 

amending the Ecological code, Subsoil code 

and general tax law, we will be working 

on developing and approving bylaws and 

introducing international reserve accounting 

standards.

As for the ideal oil and gas industry, no 

situation exists where global oil prices will 

be constantly high, which is why we need 

to guarantee stability in an industry where 

prices fluctuate. This can only be done 

based on a predictive, transparent and clear 

regulatory system. I would expect an ideal 

industry to be one that creates economic and 

technical conditions enabling it to develop. 

This means, reforming subsoil use taxation, 

transitioning to international standards for 

the construction and operation of oil and gas 

facilities, reforming ecological legislation, 

making major changes to how we approach 

the regulation of greenhouse gas emissions 

and the procedure for approving project 

documentation; amending policies in 

relation to rational development principles, 

and training competitive staff and others.

These are all system tasks that require 

constant attention. We will try to keep our 

finger on the pulse of the industry, react 

when we need to and make every effort to 

remove the barriers KAZENERGY members 

face in their work.

- We have been a KAZENERGY 

member since it was created. How do 

you see the working relationship with 

PetroKazakhstan?

- As you mentioned, PetroKazakhstan 

was one of the first oil and gas companies 

to become a KAZENERGY member. 

This means that you share our goals. 

PetroKazakhstan takes an active part in 

what we do. Earlier I talked about how 

we communicate with our members. 

PetroKazakhstan representatives are a part 

of our coordination and expert councils, 

and the many working groups we organise. 

Together, we work towards reducing the tax 

burden on subsoil users. I would like to take 

this opportunity to thank PetroKazakhstan 

group of companies top-management and 

the Strategic communication Department 

for their support of KAZENERGY in various 

international events such as the World 

Petroleum congress, the International 

Economic Forum, where the Association 

represented the interests of the country’s 

entire fuel and energy industry. Finally, 

we really do value the assistance provided 

by PetroKazakhstan in promoting the 

KAZENERGY Eurasian Forum.

The PetroKazakhstan oil refining division 

is also celebrating an anniversary this year, 

and to that end, I would like to congratulate 

PetroKazakhstan Oil Products with its 

30th anniversary! I hope our partnership 

continues, remains strong and brings many 

more mutual benefits.

We wish you further successes and 

thank you for the interview!

МҰНАЙШЫ      

Қыркүйек 2015

63

It’s worth to mention that 

modernization and upgrade projects 

have been constantly implemented at 

PKOP since its acquisition in 2000 with 

significant funds being invested. One 

of the Refinery’s achievements - cost 

reduction and refining performance 

improvement - happened thanks 

to implementation of production 

development programmes; upgrade of 

current facilities and implementation of 

state-of-the-art technology. In particular, 

a number of projects to improve 

petroleum product quality and range 

have been completed, for example the 

replacement of a reforming unit catalyser 

and production equipment.

Increased repair interval was of 

special importance and has warranted 

a number of projects to improve the 

reliability of core refining facilities. 

That allowed longer non-interrupted 

Refinery operations without stopping it 

for annual turnaround. Every year, PKOP 

upgrades fire and ecological security. 

Thus, monitoring underground water 

in inspection wells close to the refinery 

and at the Akdala evaporation pond were 

held, and a project to end underground 

water pollution has been implemented.

Yet, the Shymkent refinery 

Modernization Project is a massive 

undertaking that will open a new page 

in PKOP development. The Project 

was launched in 2011 and is due to be 

completed by the end of 2017 when 

refinery output meets global standards. 

The goals of the Project are to:

•  restore planned oil refining capacity 

to 6 million tonnes per year from 

current 5.25;

•  increase oil refining depth to 90%;

•  improve output quality to Euro-4 and 

Euro-5 in line with customs Union 

technical regulations;

•  increase product range with high 

added value products such as propane-

propylene (petrochemical raw 

materials), elementary sulphur and 

MTBE (the high-octane component 

of gasoline);

•  reduce harmful atmospheric 

emissions.

The Project benefits include expanding 

of capacity to increase light petroleum 

products yield. This is a good way of 

replacing imports with domestic goods, 

creating new jobs in Shymkent and 

further improving the ecological safety of 

the production process.

The PKOP Modernization Project has 

been included in the State Programme 

for the Accelerated Industrial and 

Innovative Development of Kazakhstan 

and is due to cost US$ 1.8 billion, which 

will have to be funded from a number 

of sources, including at the interstate 

level. To this end, as part of his May 2014 

visit to china, President Nazarbayev 

signed a Memorandum with the Export 

and Import Bank of china to open a 

US$ 1 million credit line to realise the 

Modernization Project.

The Modernization Project will be 

divided into two stages.

1st stage

To produce Euro-4 and Euro-5 motor 

fuel according to customs Union 

technical regulations, the first stage of the 

Project involves building two new units 

(sulphur production and isomerisation) 

and upgrading the diesel hydrotreatment 

unit.

Diesel hydrotreatment unit work was 

completed in March 2014 resulting in a 

new 22 m high, 219 tonne and 177m3 

R-301-1 reactor with more than 106 

tonnes of catalytic agent at the С-300/1 

unit. Masterstroi LLP was responsible 

for reactor foundations and reinforced 

structures, while RMU LLP dealt with metal 

structures, pipe fittings and installing the 

reactor itself.

In June 2015, the reactor was 

successfully tested at 1.5 million tonnes/

year productivity levels achieving design 

performance with the production of 

Euro-5 standard diesel. The new reactor 

will help the refinery produce ecologically 

friendly diesel that meets Euro-4 and 

Euro-5 standards.

PKoP ReconstRuctIon AnD MoDeRnIZAtIon 

PRoJect - InteRIM Results

the transformations taking place at PKoP as part of the Modernization Project will 

open up new possibilities, not only for the company itself, but for the region and 

country as a whole. the production of ecologically friendly gasoline and diesel and 

the development of new products for petrochemistry will have a positive impact on 

the ecological situation in the region, meet market requirements and have a knock-

on effect in terms of the development of related sectors in the south Kazakhstan 

oblast.

According to KazMunaiGas - Refining and Marketing, the average PKOP technological 

complexity or Nelson index after Modernization will be 8.0.

The Nelson Index was developed by Wilbur Nelson in 1960-1961 to measure the 

secondary conversion capacity of an oil refinery relative to primary distillation capacity. 

The index assigns a complexity factor to each major refinery facility based on its 

complexity and cost in comparison to crude distillation, which is assigned a complexity 

factor of 1.0. For example, the catalytic cracking unit, depending on the technology 

used (R2R, RFcc, MHc, SHc and others) has a coefficient of 2-4, i.e. it is 2-4 times more 

complex than the crude distillation unit at the same productivity levels. Thus, by adding 

together the complexity values given to each unit of equipment, you obtain the refinery 

complexity according to the Nelson Index.

The Nelson Index is being used more and more often in determining project 

effectiveness, replacing the term “refining depth”. The Nelson Index indicates not only 

a refinery’s investment intensity or cost index but also its potential value addition and 

enhancement of its secondary conversion capacity.

For comparison purposes, the current Nelson Index at US refineries is 10.4, European 

refineries - 7.8, and Russian refineries (also carrying out major upgrade work) - 4.5. The 

current average Nelson Index at Kazakhstan refineries (before completion of upgrade 

projects) is 5.4, and after completion it will reach 11.3 at Atyrau refinery and 9.2 at 

Pavlodar refinery.

64

Қыркүйек 2015      

жүктеу/скачать 4,97 Mb.

Достарыңызбен бөлісу: