Zhenis (oil and gas project)

2023: Project Closure

On July 11, 2023, the Kazakh national oil company KazMunayGas (KMG) announced the absence of oil at the Zhenis site. This project is being implemented on the Caspian shelf of Kazakhstan together with the Russian company Lukoil.

Zhenis is an offshore oil and gas exploration project. It is being worked out through the operator Zhenis Operating LLP with 50/50% participation shares together with Lukoil Kazakhstan Upstream LLP. The contract for exploration and production of fuel at the Zhenis site was signed in 2019 between the Government of Kazakhstan on the one hand and investors on the other - Lukoil and KazMunayGas. At that time, the probability of success of the initiative was estimated at 20%, and the necessary investments were supposed to be $350 million.

Lukoil did not find oil in the Kazakh sector of the Caspian. $350 million project is being curtailed

Geological exploration implies the presence of a certain level of probability of detecting resource reserves, that is, there is always a risk of finding hydrocarbon deposits based on the results of drilling wells below the expected level, or even obtaining a "dry" well. According to global statistics, the probability of success at the level of 20-30% is considered good for accepting this risk and starting investments in geological exploration. Investments from Lukoil were attracted to carry out geological exploration and clarify the prospects of the site. However, as they say, in the case of the Zhenis project, investments in funds did not justify themselves.

Unfortunately, the drilling of the exploration well on the Zhenis structure confirmed the absence of hydrocarbon filling of the trap. The geological risk was realized. At the same time, the results of the work helped to clarify information on the structure of the subsoil within this sedimentary basin to adjust the strategy of further geological search for other KMG projects, the official statement said.[1]

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