In August 2014 a new Ministry of Energy was founded. Please tell us more about the benefits of a single Ministry of Energy for priority projects?
The Republic of Kazakhstan occupies the 18th position in the world in the production of primary energy resources, 12th position in oil and gas reserves, and 2nd position in uranium reserves. It seems like a logical and tested step for us to create one single ministry to look over all the energy departments in our country, such as transport infrastructure, the oil and gas sector, nuclear energy, possible alternative sources of energy, and the issue of transition to the green economy. Moreover, our ministry is responsible for the issue of environmental protection, which allows us to avoid unnecessary cross-department bureaucratic barriers, and cut the time required for decision making, thus increasing our own efficiency.
Production at the Kashagan deposit has been delayed until 2016. What is the Ministry's strategy in terms of compensation for oil production at other sites?
It is widely known that after the start of oil extraction at Kashagan in September 2013 several leaks were discovered in the sour petroleum gas piping, which led to a complete halt in production. The inspection of the piping system indicated that repairs are necessary for the proper operation of the facility. In order to ensure economic growth and price stability for raw hydrocarbons, the ministry introduced corrections into the resolution entitled “On establishment of uniform rules of rational and complex usage of subsurface resources during the extraction process," which proposes the increase of norms of selection of raw hydrocarbons to 10% per year instead of 2% per quarter. This measure was part of other projects aimed at increasing economic growth and stability by the end of 2014, approved by the protocol of the Prime Minister's council in September 2014. Moreover, the ministry is working on including into the contracts of subsurface resource developers the obligation to deliver raw materials to the internal market of the Republic of Kazakhstan.
How do you try to attract new investments into Kazakhstan's oil sector?
Based on a message from the President of the Republic of Kazakhstan on January 17, 2014, and as part of the project to see Kazakhstan included among the 30 most developed countries in the world, special attention is being paid to geological exploration and the attracting of new investment from foreign engineering companies and technological enterprises for geological exploration. The Ministry of Energy is conducting several projects for the development of geological examination. A tender was issued for the right to explore and use subsoil resources on two sites in the Kizilordinskiy and Atyrauskiy regions, which cover a combined area of 5,472 square kilometers. The final amount of the tender came to KZT4.51 billion, of which the amount of social deductions is KZT360 million. The ministry is planning to hold another tender to provide the rights of exploration and use of subsoil resources on other sites. On the direction of the President of the Republic of Kazakhstan, the Ministry is carrying out Project Eurasia, the main purpose of which is the exploration of the deep geological structure of the Pricaspian region with the aim of discovering raw hydrocarbons. The project will facilitate work by an international consortium consisting of members of large petrol companies interested in the program. The Republic of Kazakhstan has a successful track of conducting similar works in the Caspian Sea bed, having created a consortium in 1993.
Recently, you acted as the head of Kazakhstan's delegation to the IAEA's 58th General Congress. Could you please comment on Kazakhstan's strategy for global nuclear disarmament?
The Republic of Kazakhstan became the first country in the world to voluntarily give up nuclear arms and shut down nuclear testing areas on request from its citizens. In 1991 the historic Order No. 409 from the President of Kazakhstan closed the testing ground and destroyed the last nuclear weapons. As part of the project of nuclear disarmament, The Republic of Kazakhstan signed the Lisbon protocol to the Strategic Arms Reduction Treaty, whereby it confirmed its obligations for the non-proliferation of nuclear arms. In December 1993 the Semipalatinsk testing ground was de-commissioned, and the same year Kazakhstan became one of the first countries to join the treaty of non-proliferation of nuclear arms, and in December 1994 leading nuclear states around the world signed a memorandum to guarantee Kazakhstan's safety. In 1994 the removal of all nuclear weapons from the country was completed. The process of nuclear disarmament in the Republic of Kazakhstan was finalized in 2000 when the last building on the nuclear testing ground in Semipalatinsk was scrapped. Our country has been systematically supporting global initiatives to provide nuclear safety and will be carrying on with these policies in the future.
Kazakhstan has expressed its intention to build its first nuclear power plant. What is the potential for nuclear energy here and what impact will it have on the country's development?
Nuclear power, compared to traditional energy sources, and especially coal energy, holds quite a few convincing advantages. Chief amongst them is the low cost of energy generation and ecological benefits, which makes nuclear power one of the most competitive sources of energy in the world. Today, the Republic of Kazakhstan has all the right elements to develop its nuclear power industry. To elaborate on this idea, our key advantages are: an abundance of geologically explored uranium reserves; a developed industry in uranium extraction and processing; developed nuclear science; a sufficient number of qualified specialists in the area; and a legal base to regulate the questions of nuclear energy usage according to the requirements of IAEA. The development of the nuclear energy sector will allow us to use fuel and mineral resources in a balanced way, increase the export potential of the country, ensure the green benefits of power technologies, develop nuclear technologies for usage in different sectors of the economy, and boost the socio economic development of the country's territories in the regions where nuclear power stations are to be constructed.
On the topic of the approaching Expo 2017: Energy of the Future, what support does the Ministry of Energy provide for the development of renewable energy programs in the country, and how does it assist the transfer of knowledge and technological advancements for a green economy?
Despite the fact that the Republic of Kazakhstan is abundant in traditional energy sources, such as oil, coal, gas, and others, we fully understand that these energy sources are non-renewable. Moreover, their usage is harmful to the environment, and Kazakhstan is also full of renewable sources of energy, such as hydro, wind, solar, and others. Therefore, not making use of these resources would be unreasonable. As of January 1, 2014, energy in the Republic of Kazakhstan was being produced at 76 power stations, with a combined capacity of 20,591.5 MW. The share of hydropower in our overall production is 2,583 MW, wind power 5.6 MW, and solar power just 0.5 MW. The whole share of hydropower stations in the country is 8.1%, and other stations, including small hydro stations, amount to 0.3%. These numbers are not too encouraging but we are working toward improving this. Our Ministry, along with the related government departments and large national companies, is directing systematic work to introduce and spread the production of renewable energy in the country, and preparing for Expo 2017 is a part of that. In July last year, taking into account the best global practices as well as current affairs in the country, the active law on supporting the usage of renewable energy sources was further improved. The new law was directed not only at supporting investors but also consumers. At the same time, some concrete measures of support are being taken to achieve the key indicators of alternative energy development. According to the “Kazakhstan 2050: a new political course for a successful country" strategy, President Nazarbayev set out his goal to develop alternative and renewable types of energy. By 2050, such sources will provide for no less than half of all energy used among the population.
© The Business Year - February 2015