Kazakhstan and China: Zhylyoy oil and gas project

Signing of a contract between the Ministry of Energy of Kazakhstan, a national company KazMunaiGas Chinese China National Offshore Oil Corporation Int. Ltd (CNOOC) oilfield "Yellow." This marks an important milestone in the development of the energy partnership between the two countries. This is the first time that CNOOC, one of the largest Chinese players in the oil and gas sector, enters the Kazakhstan market.

Geography of the project: Zhylyoy field

• Location.: northeastern part of the Caspian Sea, Atyrau region
• Area of the fieldabout 960 km2
• Location type: mixed - part under water, part on the dried up area of the former bottom of the Caspian Sea
• Featurescomplex geological conditions, high level of technical and environmental requirements

Parties to the agreement

KazMunayGas (KMG):

• National Oil and Gas Company of Kazakhstan
• Operator of strategic fields
• Initiator of attracting foreign investments in geological exploration

China National Offshore Oil Corporation (CNOOC)

• China's Third Largest Oil Company
• Specializes in oil and gas production on the shelf
• Presented in the project through a subsidiary structure CNOOC Hong Kong Holding Ltd.

Format of cooperation:

• Joint venture: 50% - KMG, 50% - CNOOC
• Financing of geological exploration falls entirely on the Chinese side

Project phases

1. Signing of the contract (June 2025)

• The final agreement was concluded between the Ministry of Energy of Kazakhstan, KMG and CNOOC Int. Ltd

2. Geological exploration (2025–2027)

• Seismic survey: 400 km2
• Reinterpretation of historical data
• First well: above-salt horizon, depth 2000 m m m
• With positive results:

Second well: subsalt horizon, depth 4,500 m

3. Transition to production (with the success of exploration)

• Large-scale drilling and infrastructure construction
• Potential hydrocarbon development and export to China and other countries

Comments by the parties

This event marks an important stage in the development of strategic partnership between Kazakhstan and China in the oil and gas sector., — emphasized in KMG.

This is CNOOC’s first step in Kazakhstan, and we look forward to long-term and mutually beneficial cooperation., — said representatives of the Chinese side at a meeting with Askhat Khasenov in Beijing in August 2024.

Geopolitical and economic importance

For Kazakhstan:

• Diversification of sources of investment
• Development of a technically complex and long-frozen site
• Technology transfer and exchange of experience
• Growth of export potential in oil and gas

For China:

• Strengthening energy presence in Central Asia
• Increasing access to raw materials for domestic needs
• Strategic alternatives to volatile markets (e.g. Middle East)

Technical challenges

• Deep drilling (up to 4500 m) in difficult geological conditions
• Partially maritime zoneRequiring the use of offshore drilling technologies
• The need environmental monitoring Caspian
• Logistics and supply in a remote area

Expected accomplishments

• Clarification of oil and gas reserves at the site
• Potential access to industrial production by 2028-2029.
• Growth of foreign direct investment in oil and gas sector of Kazakhstan
• Expansion of scientific and technical potential of Kazakhstan specialists

The project "Zhylyoy" is not just geological exploration, but strategic allianceIt reflects the trend of rapprochement between Kazakhstan and China in the energy sector. Given the high level of trust and mutual interests, it can be expected that the successful implementation of this project will open the door to the future. new joint initiatives in the Caspian region and beyond.