Speaking notes for XI KAZENERGY Eurasia Forum Investment prospects of the Precaspian petroleum basin at the present stage Speaking notes for XI KAZENERGY Eurasia Forum

A global trend for transfer to renewable energy is on the rise and this encouraging phenomenon of the present time is demonstrated convincingly at the EXPO 2017 International specialized exhibition “Future Energy” in Astana, has given impetus and laid the basis for economic development of the Republic of Kazakhstan in new direction 2

On the way of creation and development of alternative energy in the Republic of Kazakhstan, the leading role of oil and gas will remain for long Over 85% of recoverable reserves of oil and over 70% of free gas reserves registered in the state register are brought into production at producing fields of the country Current abundance is only temporary. Even today we should be concerned about issues of ensuring energy independence of the country in the expected transition period and in case of possible perturbations in the economy 3

According to the landmark book of renowned Kazakh petroleum geologists “Scientific substantiation of hydrocarbon potential of the Republic of Kazakhstan”, recoverable forecast resources of hydrocarbons in 15 sedimentary basins in the Republic are 76 billion tons in oil equivalent As you can see there are prospects and they are tremendous. Petroleum potential includes considerable explored reserves and even more considerable forecast resources 4

Oil and gas basins in Kazakhstan 5

Productivity of sedimentation mass was determined in 6 oil and gas basins of the country. Each basin is unique both in its geological structure, stratigraphic range of platform cover and productive formations, territorial belonging and reserves and quality of raw hydrocarbons. Continuing with search for hydrocarbons and replenishing reserves of hydrocarbons also in other strategically important regions, the Precaspian basin which hosts over 80% of forecast recoverable reserves of hydrocarbons remains the most attractive of them. 6

Precaspian basin. Density of hydrocarbon resources by zones 7 Precaspian basin. Density of hydrocarbon resources by zones

Schematic geological cross-section of the southern margin of the basin 8

Schematic geological cross-section of the eastern margin of the basin 9

Schematic geological cross-section of the northern margin of the basin 10 Schematic geological cross-section of the northern margin of the basin

Discovery and accelerated conversion of these forecast hydrocarbon resources into commercial categories of reserves remains the key issue. How exploration should be carried out and how success of exploration can be ensured? And here we will refer to practical expertise of previous years, results of research activities and technological innovations 11

To solve the task of national importance, geological exploration activities should be intensified in the most prospective lines. This calls for: support to the efforts of the Committee of geology and subsoil use of the Ministry of investments and development to conduct regional study of prospective sedimentary basins, introduce institute of expert – analytical research to improve the efficiency of geological exploration operations; 12

development and phase-by-phase implementation of updated road map; creation and improvement of favourable conditions for potential investors ( free access to geological and geophysical information) and tax exemptions to encourage inflow of investments in subsoil use objects; considerable attention to deep horizons and search for oil in bottom layers of sedimentation mass 13

The platform cover of the Precaspian basin consists of pre-salt and post-salt megacomplexes separated by salt- bearing section acting as regional seal for pre-salt reservoirs Modern petroleum potential of sedimentary cover of the basin is associated with generation potential of Paleozoic Pre-Kungurian deposits 14

Post-salt sequence is rich in oil and gas shows where over 100 oil and gas fields are known with recoverable reserves from 1-2 million to several tens of millions tons at relatively shallow depths Hydrocarbon potential of Mesozoic formations (Triassic, Jurassic, Cretaceous) is far from being exhausted. However anticipated resources of post-salt megacomplex will not satisfy ever-increasing needs of the industry 15

Main reserves of raw hydrocarbons are concentrated mostly in sedimentary strata of Paleozoic post-salt sequence. There are major and giant fields such as Karachaganak, Kenkiyak, Zhanazhol, Tengiz, Kashagan, etc among four tens of discoveries Further prospects for discovery of new accumulations with considerable reserves are associated particularly with Upper Paleozoic deposits at the depths of 6-8 km and deeper 16

Regional oil and gas bearing complexes are distinguished here: prospective Pre-Devonian (presumably terrigenous); Devonian- Middle Visean (carbonate-terrigenous); Upper Visean- Asselian (carbonate); Sakmarian- Artinskian (terrigenous and terrigenous – carbonate ) 17

Essential prerequisites for this are: Improved knowledge of prospective section and determination of regularities in occurrence of accumulations (presence of reservoir strata, hydrocarbon phase in conditions of abnormal high formation pressure and high temperatures) Readiness of common geological concepts of development of this unique halogenic basin characterized by significant resource potential which is not realized yet 18

Essential prerequisites for this are: Large-size pre-salt highs with abnormal high formation pressure and reliable evaporite covers, considerable thicknesses and high flow rates from productive strata, substantial reserves of hydrocarbons Observed reduction of aggressive component content in hydrocarbons with depth Positive global experience of discovery of over 500 oil and gas accumulations at the depths of 6-9 km 19

Successful results of deep well drilling at fields Tasym South –East (Carboniferous – Lower Permian, 7050 m), Urikhtau (Upper Devonian-Carboniferous), Karatobe-Burbaytal (Carboniferous-Lower Permian, 6750 m), Chinarevskoye (Middle Devonian-Carboniferous), Rozhkovskoye (Middle Devonian - Carboniferous), Akzhar East (Lower Permian), Ansagan (Upper Devonian- Lower Permian, 6200 m) confirm the rightfulness of search for deep oil in Lower Permian, Carboniferous, Upper and Middle Devonian formations at the present stage 20

Notable progress has been achieved over recent years in the technical provision of drilling works, technological opportunities of seismic studies; a new generation of engineers has come into the industry These positive changes have resulted in a noticeable progress in the detalization of deep structure of the region in general, and in increasing optimism towards the opportunities of discovering large hydrocarbon deposits in the lower sections of the basin 21

Core and surface sample at Ansagan field (Upper Devonian, 5704 m) 22

Flaring of formation fluid at Ansagan 23

Examples of exploration targets 24 Examples of exploration targets

Examples of exploration targets 25 Examples of exploration targets

Examples of exploration targets 26

This is “Gold Belt” of the Precaspian basin Petroleum geologists of Kazakhstan firmly believe that this ring necklace will be enriched with new significant discoveries in years ahead 27

Назарларыңызға рахмет! Cпасибо за внимание! Thank you for your attention!