ALMATY/MARCH 11 (The Bulletin) — Britain’s BP has walked away from three oil and gas projects in the Kazakh sector of the Caspian Sea, saying that it wanted to focus on developing its renewable energy portfolio instead, Kazakhstan’s state-owned Kazmunaigas said (March 11).
BP’s decision to ditch potential projects in the Caspian Sea with Kazmunaigas, which it explained in a letter in October last year, will concern Kazakh officials who still see exploiting oil and gas potential as the quickest and most certain way of pushing economic development forward.
Kazmunaigas said that it was publishing BP’s letter on its website in response to media speculation on why progress on the three hydrocarbon blocks has stalled.
“The decision is related to a revision of the company’s strategy — BP intends to focus its activities on renewable energy sources,” Kazmunaigas wrote.
For the 18 months up to October 2020, BP had been evaluating the potential for developing the Bolshoy Zhambyl, Zhemchuzhnaya and Kalamkas Sea offshore blocks, located near the Karachaganak oil field. Karachaganak is Kazakhstan’s largest post-Soviet oil discovery but it has been beset by cost overruns and production problems.
BP’s exit from the Kazakh sector of the Caspian Sea follows a decision by Royal Dutch Shell in 2019 to also quit two oil projects because the costs were too high.
During the coronavirus pandemic, oil prices plunged and last year BP said that it wanted to restructure its portfolio and cuts its hydrocarbon base by 40% over the next decade.
ENDS
— This story was published in issue 475 of the Central Asia & South Caucasus Bulletin, on March 15 2021
— Copyright the Central Asia & South Caucasus Bulletin 2021
