FIELDS OF DREAMS

Kazakhstan 2018 | ENERGY & MINING | INTERVIEW

TBY talks to Olivier Lazare, Vice President and Country Chair of Shell Kazakhstan, on 25 years of partnership with Kazakhstan, the Kashagan and Karachaganak fields, and expectations for the future.

Olivier Lazare
BIOGRAPHY
A French native with a PhD in nuclear physics, Olivier Lazare has over 30 years’ experience with Shell. His career has included a diverse range of roles in engineering, contracting and procurement, strategy and planning, and new business development, taking him to the UK, the Netherlands, Gabon, Brunei, Oman, Australia, the US, and Russia. Since 2013, prior to this appointment, Lazare held the role of Country Chair in Russia.

How would you describe the evolution of Shell's success story in the country since it first arrived?

Kazakhstan is a unique country. It is not only by the immensity of the country but also by its economic power and geopolitical influence. Kazakhstan has made an eminent journey of remarkable development and has now become the leading country in Central Asia. The country now heads the region in terms of its business environment and has shown the world what can be achieved. It is this dynamism and bright sense of future that attracted Shell to establish itself here since Kazakhstan's independence. Historically, we have long roots in the region, as Shell's presence in the Caspian region stretches over 100 years and here in Kazakhstan dates back to the early 1990s. Our company was one of the first foreign investors to acknowledge the great potential this newly sovereign nation offered and have followed this path of partnership with Kazakhstan ever since. We have invested billions of dollars in oil and gas projects, both onshore and offshore. The combination with BG Group last year enlarged Shell's operations further, and we are and intend to remain one of the largest foreign investors in the country. This year is the 25th anniversary of our presence in country. Shell has achieved a great deal over the past years as a result of our efficient and true cooperation with our joint ventures' partners and the government of Kazakhstan.

What have been the key operational developments at Shell in Kazakhstan over the past year?

In country, we are involved in several major projects. In 2016 we resumed production at the offshore Kashagan field. This was an enormous milestone in our journey to bringing Kashagan safely and reliably into production. NCOC NV, the operator, has shown great resilience in overcoming multiple difficulties over the years. At the moment Kashagan ramp-up is ongoing and production exceeded expectation despite some teething problems usually associated with the start of such a giant project. In 2017, it delivered successful growth reaching an average production of over 220,000boe/d. Our top priority for Kashagan is to provide maximum support for NCOC NV to ensure safe operations. Another major Asset is jointly operated by Shell and Eni: the Karachaganak project, one of the world's largest gas condensate fields. Karachaganak has delivered the highest production ever, reaching 92% in availability. The record production in 2017 was an average of 390,000boe/d for the year. Karachaganak also achieved high standards of safety, reliability, and environmental performance. The current performance of Karachaganak is world class and credit goes to all those involved in our day-to-day operations. However, we must never be complacent and constantly focus our efforts on delivering safe and reliable production.

What significance does Kazakhstan play for the company's global operation?

Kazakhstan is a very important country and one of the building blocks of the Royal Dutch Shell portfolio. We are in the top-five of Shell's upstream segment, making a tremendous contribution to the company's cash flow.

What are your expectations for the company and the oil and gas sector in Kazakhstan in 2018?

Our primary focus is to ensure safe and sustainable operations at all our assets in the country with a focus on local content development. The mid to long-term development of Karachaganak beyond the above period is to maintain liquids offtake at current rates. A series of medium-scale projects are planned to drill more wells and upgrade the gas handling and disposal capacity of the existing field facilities. We are working together with KPO and the JV partners to land an economic concept of further field development. At Kashagan we focus on safe ramp-up targeting to the capacity produce 370,000bpd as soon as possible. We have been in Kazakhstan for 25 years now and we are committed and ready to help the country unlock its vast energy potential in a sustainable way for the benefit of the government and people of Kazakhstan for decades to come.