Kazakhstan to computerize entire oil and gas sector

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The energy ministry is planning to implement oil accounting information system that will help curb oil theft in Kazakhstan.

Program to increase production volume from 2% to 5%, reduce the use of materials and equipment by at least 10%, and improve energy efficiency by 20%


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Kazakhstan’s Minister of Energy Kanat Bozumbaev announced on March 1 the plans to digitize his industry. He said that KazMunaiGas’ practice of automated oil production would be extended to all oil fields of the country.

Prompted by the country’s President’s address in which he talked about the building of a so called “Industry 4.0” in Kazakhstan, all ministries and agencies started thinking about how they could digitize their industries.

The Ministry of Energy was no exception. At an industry meeting on March 1, Bozumbaev announced that the “Intellectual Oil Field” or “Digital Oil Field” programme would become a priority for his ministry in the nearest years, building on the experience of the national company KasMunaiGas.

“This programme will provide for automation of oil and gas production, it will increase production volume from 2% to 5%, reduce the use of materials and equipment by at least 10%, and improve energy efficiency by 20%,” the minister said.

He was confident in the success of the programme. It has already been piloted at a KasMunaiGas field, and is presently being introduced at the Uzen, Nurzhanov, and Akshugyla fields.

“In the future, we plan to introduce this programme on all the fields across the country “ Bozumbaev said.

In addition, the energy ministry is planning to implement oil accounting information system that will help curb, at long last, oil theft in Kazakhstan.

“The implementation of oil accounting information system for automated collection, processing, use and storage of data…will allow us to automate the accounting of oil production and turnover volumes, and of all technical losses resulting from the turnover of oil. This innovation should reduce all kinds of production and transportation losses, as well as prevent the criminal schemes that we see from time to time at our mini-refineries,” Bozumbaev said.

He talked about the investigations currently conducted by the National Security Committee with respect to the organized criminal groups that were “sucking” from the Kazakh pipelines in several parts of the country.

This year, legislative amendments will be developed to support the implementation of a common accounting system. The next two years (2018-2019) will see the implementation itself, and by 2020, the common accounting and control system will be used at all fields and oil pipelines of the country.

Liquefied gas will be the first oil product to e-trade. The ministry of energy is planning to begin building an electronic trade system for LG markets.

“We plan to start selling all kinds of oil products in the nearest future through electronic trading platforms. We want to start with the liquefied gas,” Bozumbaev said.

The minister explained that liquefied gas was chosen as a “pilot” for e-trade because of the difference between the export and domestic prices. For example, the export price for Central Asia and Russia is five to seven times the internal market price per tonne.

“It is natural, therefore, that issues arise at the internal market, that it becomes feverish, and that shady exports increase,” the minister admitted.

According to him, involved in the current mechanism of distribution of liquefied gas are ministry officials, regional officials, and refinery managers. “The system is not quite transparent, but it is what it is,” the minister acknowledged.

He added that the ministry was going to make changes to the legislation before the end of this year to provide for a phased increase of volume of e-traded gas every six months starting next year.

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