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Nazarbayev expects serious oil from Kashagan

13 february 2014, 21:10
Kashagan oil field. ©Reuters
Kashagan oil field. ©Reuters
Kashagan oil field. ©Reuters
Kashagan oil field. ©Reuters
Kashagan oil field. ©Reuters
Kashagan oil field. ©Reuters
Kashagan oil field. ©Reuters
Kashagan oil field. ©Reuters
Kashagan oil field. ©Reuters
Kashagan oil field. ©Reuters
Kashagan oil field. ©Reuters
Kashagan oil field. ©Reuters
Kashagan oil field. ©Reuters
Kashagan oil field. ©Reuters
Nursultan Nazarbayev, President of Kazakhstan, is expecting some ‘serious’ oil from flicking Kashagan oil field at the Caspian Sea in 2014, Tengrinews reports citing a Bloomberg story.

The President told Bloomberg that he spent a half of his 23-years as president of Kazakhstan waiting for the production to start at Kashagan.

The project has gulped up $48 billion and has got everything in place including a sophisticated artificial island, drilling rig, onshore gas processing plant and pipelines, but still no stable oil production. The production was delayed many times, saw swelling of costs, experienced a change of operator in the past decade and finally started flickering in and out in the last quarter of last year. Now the repair works are to be complete in the Q1 of this year.

Hopeful that the ill-fated field will eventually start yielding, Nazarbayev expects Kashagan field to make a tangible contribution into the growth pace of the Kazakhstan economy and help the country retain its GDP growth have at 6% or higher until 2018.

The oil field is expected to deliver over 370,000 barrels of oil per day when it reaches the flat and to double this amount after the second phase of development.

“Kazakhstan must decide how much oil to produce,” Nazarbayev said in the interview to Bloomberg. But this is hardly something the foreign developers should worry about since their goals agree: “We can say let the rest be for future generations. But we don’t want to do it that way, we will continue our work,” the president continues.

Kazakhstan is so concerned about the drawbacks in the development of the gigantic Caspian oilfield because oil production in Kazakhstan as peaked and it has no other way to go but down, unless the ice is finally broken on several major projects developed by foreign consortiums with Kashagan being one of them and Tengiz another.

“The government and Tengiz venture partners agreed on expansion,” Nazarbayev told Bloomberg, which good news to both Kazakhstan and the foreign developers, but there is one more thing that Kazakhstan was pressing hard to get over the past year: Kazakh content.

“I want to say it clearly, we ask and sometimes demand that oil companies create Kazakh content,” he said meaning that he wants the foreign companies to purchase local equipment and services and hire more locals, including to managerial positions.

The first production started at the giant oilfield on September 11, 2013, but was suspended after two weeks because a gas leak was discovered. The production was haltered to seal the leak and restarted on October 6 only to be halted again 3 day later because another gas leak was found.

A part of the defective pipe was dug up and set to a lab in Britain for tests. The experts suppose that there may be hairline fractures in the pipe that was caused by corrosion occurring because of contact with sulfurated hydrogen (Kashagan oil field has a high content of sulfured hydrogen gas).

Meanwhile, the North Caspian Operating Company (NCOC) that operates the Kashagan oil field, expects the results of the test to be available in February 2014. After that it will decide when and how the oil production will be resumed.

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