S.Sarbufina

Institute of Economics, Academy of Sciences RK

Kazakh-British Technical University

The analysis of a condition of a petroleum-refining industry

of Republic Kazakhstan.

In modern conditions steady and forward development of economy of Republic Kazakhstan in many respects depends on prospects of development of one of base and priority branches of production of goods - a petroleum-refining industry. The basic precondition of development of oil refining branch is oil extracting.

Oil and gas deposits of republic are concentrated in Atyrauskaya,Mangistauskaya, Aktyubinskaya, West-Kazakhstan, Kyzylordinskaya and Zhezkazganskaya areas. The basic center of the oil-extracting industry of republic is the Western Kazakhstan. In territory of Atyrauskaya and Mangistauskaya areas is more than 70 % of the deposits containing large industrial stocks of oil, 91 % of developed deposits also are concentrated in territory of these areas( see picture 1).

To the largest deposits of hydro carbonic raw material concern:

- Tengizskoe (oil-and-gas) - initial taken stocks of oil made 721, 9 million t;

- Uzenskoe (oil-and-gas) - residual taken stocks of oil make 231, 9 million t;

- Karachaganakskoe (oil-and-gas) - residual stocks of oil structure 166, 4 million t;

- Zhanazholskoe (oil-and-gas) - residual stocks of oil make 115, 3 million t;

- Kalamkas (oil-and-gas) - residual stocks of oil make 92, 9 million t.

Picture 1- The largest deposits of hydrocarbons.

Rapid development and even more impressing prospects of oil-extracting branch of Republic Kazakhstan create favorable conditions for formation here the powerful processing industry capable not only completely to satisfy internal needs for production of oil refining and petrochemistry, but also to deliver it on foreign markets. Development of a petroleum-refining industry of the country as a whole is focused on steady maintenance of needs for all kinds of mineral oil, creation of additional capacities on primary and secondary processes for a deepening of processing of raw material both due to reconstruction and expansion operating, and due to input new.

Priority direction of development of oil refining manufacture is full self-maintenance of internal needs of republic by the basic kinds of mineral oil - to gasoline, aviation kerosene and diesel fuel . Full self-maintenance of the petroleum products now is inconvenient because of absence in contracts of obligations subsoil users on deliveries of resources on domestic Oil Refining (OR). Dynamics of need of Kazakhstan in the basic mineral oil in a cut of industries is presented in tables 1, 2.

Table 1 – The dynamics of the needs of Kazakhstan in gasoline, in thousand tons 

Indicators	Years
	1992	1997	2002	2007
The main consumers, all	4300,0	4500,0	4700,0	4800,0
including:
–industry	30,0	35,0	50,0	65,0
–building materials industry	100,0	120,0	150,0	175,0
–transport	3690,0	3580,0	3300,0	2925,0
–agriculture	120,0	250,0	400,0	470,0
–municipal needs	300,0	450,0	720,0	1080,0
–other consumers	60,0	65,0	80,0	85,0
Note - Table compiled by the Agency of Kazakhstan on statistics for 1992-2007

Table 2 - Kazakhstan needs Dynamics in diesel fuel, in thousand tons 

Indicators	Years
	1992	1997	2002	2007
The main consumers, all	7800,0	8560,0	9540,0	10300,0
including:
–industry	290,0	230,0	325,0	330,0
–building materials industry	450,0	475,0	510,0	550,0
–transport	4088,0	4390,0	4790,0	4990,0
–agriculture	2676,0	3010,0	3490,0	3880,0
–municipal needs	106,0	160,0	210,0	330,0
–other consumers	190,0	205,0	215,0	220,0
Note - Table compiled by the Agency of Kazakhstan on statistics for 1992-2007

Now three OR Kazakhstan Atyrau, Pavlodar and Shymkent are capable to process the little less than 25 extracted in the country of oil. Characterizing a condition of a petroleum-refining industry of Republic Kazakhstan, it is necessary to note, that factories were under construction during an epoch of the USSR by a principle of maintenance of geographical region mineral oil, irrespective of republican submission so the Pavlodar refinery has been constructed counting upon satisfaction of needs of northern areas of Kazakhstan and the Western areas of Russia. Its dependence on Russia as manufacture is calculated on processing of the Russian oil concerns to the basic problems of the Pavlodar refinery, and also the geographical arrangement and the scheme of railway communications of this region on many sites borders on the Russian Federation that creates additional expenses, for example, customs (see table 3).

Table 3 - Dynamics performance refineries Republic of Kazakhstan.

Indicators	Atyrau Refinery	Pavlodar Refinery	PetroKazakhOil Products
2005 year
1. Power	5 mln.t.	7,5 mln.t.	6,6 mln.t.
2. Oil refining	2,16 mln.t.	2,5 mln.t.	3,9 mln.t.
3. Downloading	50%	31,5%	43,6%
4. Penetration depth	59,9%	77,9%	60,4%
2006 year
1. Power	5 mln.t.	7,5 mln.t.	6,6 mln.t.
2. Oil refining	2,9 mln.t.	2,82 mln.t.	3,5 mln.t.
3. Downloading	53%	34%	39%
4. Penetration depth	59,9%	77,9%	60,4%
2007 year
1. Power	5 mln.t.	7,5 mln.t.	6,6 mln.t.
2. Oil refining	3,51 mln.t.	3,72 mln.t.	3,94 mln.t.
3. Downloading	71,4%	49,3%	65%
4. Penetration depth	62,5%	82%	75%

Thus, at total capacity in 19,1 million tons in 2007 year refineries have been loaded on 61,9, and quality of products let out on them remains practically former. Incomplete loading of refineries means, which the enterprises worked not on full capacity, the volume of manufacture of mineral oil has been lowered by that, the enterprises have received less than profit, and the state taxes.

Penetration depth – is a basic exponent of technical and economic perfection of a refinery. It is considered to be 93- 95% - practically as much as possible achievable result, and 50%- the lowest limit providing a recoupment of oil refining. It is necessary to note, what penetration depth of processing in the USA makes 93- 95%, whereas the Kazakhstan refineries -73%.

The difference on penetration depth of oil refining between the USA and Kazakhstan makes 20 %. It means, that American processors make light mineral oil (gasoline, diesel fuel) it is more, than Kazakhstan OR. The need of a home market makes basically light mineral oil, as the basic consumers of black oil, the thermal power station, a state district power station pass to use ecologically and economic raw material. As a result the republic, being the appreciable petroexporter in the world markets, tests chronic deficiency of mineral oil that affects reception by the budget of republic of incomes of taxes. At the same time the high world prices for oil and, a tax policy spent by republic, have made delivery of crude oil on domestic OR unprofitable. On OR there is a chronic decrease in volumes of the oil refining, aggravated by the out-of-date technologies. Because of absence of means and weak inflow of external investments increase of petro feedback and development of the fine and average deposits demanding large investments and the expensive equipment, does not occur. In turn, low congestion of the Kazakhstan factories increases specific expenses for processing. All this leads to that cost of oil refining reaches 30% from cost of an end-product (abroad this expenses twice less).

The analysis based on Agency of statistical researches, shows that a principal cause of negative work of all three Kazakhstan OR for the last some years were their low congestion crude oil owing to export orientation of the oil-extracting companies and infringement of communications with the Russian suppliers of raw material after disintegration of the USSR. At the same time, with 2006 loading domestic OR in volumes which allow covering completely needs of republic for the basic kinds of mineral oil has begun.

Summing up, it is necessary to note, that the main reason of a low consumption level of mineral oil in Kazakhstan is both rather low capacity of the Kazakhstan oil refining enterprises, and their insignificant loading, that finally causes deficiency of mineral oil and, accordingly, the overestimated prices for them. The main reasons are not developed system of oil pipelines for delivery of crude oil to internal consumers, unwillingness of the oil-and-gas companies to realize oil Kazakhstan OR.