The Development and Implementation of Subsoil Use Standards for the Petroleum Sector in Kazakhstan

Abstract

Abstract Modernization of the regulatory framework of the Republic of Kazakhstan (RoK) will complement the "100 Concrete Steps" national initiative of President Nazarbayev. Planned reforms aim to increase the transparency and predictability of the subsoil use sector by implementing an international system of reporting standards. The Society of Petroleum Engineer's Petroleum Resource Management System (SPE-PRMS-2007) is the most likely choice for the hydrocarbon sector, as the guidelines can be altered to meet the needs of RoK to increase the contribution of petroleum production to drive economic growth, improve governance, and attract more investment, along with best available practices and technologies, in RoK. A comparative analysis of the leading petroleum resource reporting systems used by governments and stock markets around the world concurred that a tailored SPE-PRMS-2007, which was named KAZ-PRMS, was the most appropriate system for the needs of RoK. Discussions were then held with a RoK Working Group, which was comprised of government bodies, technical institutes and operators, to address their concerns and to get their ‘buy-in’ to create a road map for the development and implementation of the new Code for Reporting Hydrocarbon Resources (Code) as required by international SPE-PRMS standards. The initial concerns about migrating to a new reporting system of some of the Working Group were overcome via open and lively discussions, by workshops and through focused training sessions. The various parties concurred that migrating to KAZ-PRMS could be a valid alternative to the existing RoK resource reporting system from the Soviet era, which is disliked by the international investor community. There remained some concern over the proposed speed of change presented in the road map, but there was consensus for the need for change. The administrative, technical and cultural challenges facing the RoK, which intends to radically overhaul its Soviet-era regulatory system and its petroleum resource reporting structure, whilst remaining legally compliant, are described in detail.