Abstract
Nowadays, the President of Kazakhstan, Kassym-Zhomart Tokayev, has announced the term "New Kazakhstan", and changes are occurring in many areas as well as in the oil industry. As a result, the Ministry of Energy has timely raised necessary initiatives, and the reserves system is on that list. The issue was already a hot topic 7-8 years ago, but with no outcomes. This is the second attempt, and the time may come to implement it.
The SPE-PRMS is actively proposed as a model to which the whole concept should move. Several scenarios are discussed, and the main one is that the PRMS methodology should be applied as the reserves’ assessment tool without any modifications. Nevertheless, the reporting and approval processes will be subject to local regulations. The authors suggest that in place volumes should be incorporated into field development projects, which are then expertized by the Geology Committee at the first stage of FDP's approval process, while the reserves by the Central Committee of Exploration and Development at the second stage.
As a result, we expect to resolve several issues. First, incorporating the reserves into the FDP will dramatically shorten the procedure by eliminating the reserves report approval by the State Committee of Reserves, called GKZ, of the Geology Committee. Generally, in order to start commercial production, operators need to spend at least two years on reserves reports and FDP. Secondly, in most cases, the GKZ insists on overestimated recovery factors, which leads to overestimated FDP production and drilling scope forecasts. Thus, the whole picture does not reflect reality. On the contrary, the PRMS principles are fully based on commercially, not just technically, recoverable reserves. Thirdly, the shift to a new reserves system will allow Kazakhstan to be clear and transparent for the international petroleum community. All parties will talk in common language and understand each other. That will definitely contribute to the attractiveness of the Kazakhstani oil businesses for investors, as the oil-producing countries are competing in a fierce fight for investments. Indeed, this was a reason for the 74th step of the "100 Concrete Steps of the Nation Plan" initiated by the first president, Nursultan Nazarbayev.
A possible move to a new reserves system will have a profound impact on the industry. This includes stimulating the field works, having real figures and business plans for all parties, and integrating into global society to attract new players under the market conditions. However, it is a big question if the fixed mindset will change to the needs of the hour and if it happens now or needs another 7-8 years.
