Two of the world's top oil-producing regions are looking to forge closer ties.

Representatives from Kazakhstan's KazMunaiGaz National Co. have been touring Alberta with an eye toward technology transfers and the possibility of future joint ventures.

Data ranking Canada second in terms of global proven crude oil reserves - at 15 per cent of world reserves based upon Alberta Energy figures, after Saudi Arabia - have caught the attention of energy officials in Kazakhstan, particularly the fact that the majority of Canada's reserves are found in Alberta's oilsands.

In a recent meeting with Alberta government representatives, KazMunaiGaz officials noted that about one-third of their reserves are in heavy oil, similar to the product found in the oilsands.

File photo by Jack Dagley, Business Edge
Derwin Herrera of TradeAid Corp. says Canadian companies can tap into 'enormous' oil and gas potential in Kazakhstan.

"It's known around the world that Alberta has the leading technology in heavy oil development and production, so this group of people, who are the leading executives from the national oil company, have come to Canada on a knowledge-seeking visit, and also a diplomatic visit," says Charlie Chapman, president of the mid-size petroleum engineering consulting firm, Chapman Petroleum Engineering. "But predominantly, they're looking to gain knowledge to be able to go back home and better exploit their reserves."

Chapman acted as a host for the 10 directors and deputy directors of KazMunaiGaz and subsidiary companies during their trip to Alberta and built upon the relationship he already developed with the organization. Chapman Petroleum Engineering is a 50-per-cent participant in a joint venture in Kazakhstan, providing engineering services to the oil industry, among others.

"We are trying to introduce technologies to the Kazakhstan industry that are being developed here, and we are also attempting to do a technology transfer so that our technologies can be learned and utilized to a higher extent by the Kazakh professionals that we work with," adds Chapman.

Kazakhstan has proven oil reserves that place it in the world's No. 4 spot, notes Derwin Herrera, executive vice-president of client services for TradeAid Corp, which works as a national business outsource partner.

TradeAid, which has assisted Alberta companies to enter the Kazakhstan marketplace, introduced Chapman to Kazakhstan.

"We started looking at this market in the latter part of 2003 because of its enormous oil and gas potential," says Herrera.

But that potential now has the possibility of blossoming even further.

Through a translator, the managing director of geological and technological services for KazMunaiGaz noted his company already uses modern technologies.

"We do produce heavy oil now, we use up-to-date technologies already, but this industry is fairly competitive and the technologies that we saw here we'll try to get the best out of them," said Evgueni Ogai, during the company's recent swing through Alberta.

"We'll try to take the best technologies that are applied in Alberta these days and put them together with the ones we are using now to get more incremental production."

The purpose of the visit, added Ogai, is to learn about new technologies in heavy oil production.

"We were familiar with the technologies that are used here and we got more familiar with them during this visit.

"It's premature to talk about contracts because we have to learn about all the details and to discuss it with the people there, but overall we'll do something in the future," he said.

Ogai also said he foresees the possibility of more joint ventures between Alberta and Kazakhstan.

"This form of collaboration is the best for us because it allows us to save time and it allows us to get better co-operation between the experts on both sides, and this way the partnership will be beneficial for both sides," he added.

John Cotton, an executive director with Alberta Economic Development's international offices and trade division, says the exchange of information was hailed as constructive.

"It builds on work we've been doing with Kazakhstan," says Cotton. "Any time you have personal contact and meetings of that nature, it really helps to move the business relationship along."

The ultimate result of the trip, adds Chapman, is the company will give further consideration to acquiring Alberta services and utilizing western technologies. "As they said themselves, seeing it once is more valuable than hearing about it 100 times."

Meanwhile, energy analyst Bill Magee says companies may want to put Kazakhstan on their radar screen if they haven't already done so.

"They've had the largest discovery of conventional oil in the past six or seven years," said Magee, vice-president of energy research with Toronto-based Credifinance Securities Ltd. "They're going to have one of the fastest growth rates among those producing conventional oil."

(Laura Severs can be reached at laura@businessedge.ca)