Oil production at Kashagan to be resumed in 2016: Kazakhstan’s Oil Minister

Oil production at the giant Kashagan oilfield will be resumed in 2016, a Tengriews.kz journalist reports, citing the country’s Oil Minister Uzakbai Karabalin as saying.

“At Kashagan both the oil and gas pipes have to be fully changed. 200 km of pipes have to be purchased to replace the damaged pipes. When it comes to scenarios of laying the pipes, there are two possible options. If the optimistic scenario works out, the oil production will be resumed in the first half of 2016; should we apply the second scenario, the expected time of resumption is the second half of 2016. The estimates may be adjusted (…)”, he told a briefing July 30.

Earlier the country’s media reported that Kashagan would see a new operating vehicle. The Oil Minister said late May 2014 that “both subcontractors and the Ministry were dissatisfied with the system in place up to now. It has been too costly; decision-making took a lot of time due to complexity of the hierarchy”.

When speaking July 30, he said production of the new pipes was to stat in August, with the first batch to be supplied in December 2014. “One of the key conditions for the works to be in line with the schedule is availability of barges to lay the pipelines in the Caspian Sea. It is an important issue the subcontractors are working on. The project budget is to be adjusted as soon as conditions of the delivery and prices for the pipes are defined”, he said.

The most probable time to resume the commercial production at the giant Kashagan oilfield is late 2015, the country’s Vice Minister of Oil and Gas Magzum Myrzagaliyev said May 22.

Commercial production at Kashagan started September 11, 2013. However, it was suspended 2 weeks later due to a gas leakage. The production process was resumed shortly. However, another leakage was detected in October.

The Kashagan field, named after a 19th century Kazakh poet from Mangistau, is located in the Kazakhstan sector of the Caspian Sea and extends over a surface area of approximately 75 kilometers by 45 kilometers. The reservoir lies some 4,200 meters below the shallow waters of the northern part of the Caspian Sea and is highly pressured (770 bar of initial pressure). The crude oil that it contains has high ‘sour gas’ content.

The development of Kashagan, in the harsh offshore environment of the northern part of the Caspian Sea, represents a unique combination of technical and supply chain complexity. The combined safety, engineering, logistical and environmental challenges make it one of the largest and most complex industrial projects currently being developed anywhere in the world.

According to Kazakhstan geologists, geological reserves of Kashagan are estimated at 4.8 billion tons of oil. According to the project’s operator, the oilfield’s reserves are estimated at 38 billion barrels, with 10 billion barrels being recoverable. Besides, natural gas reserves are estimated at over 1 trillion cubic meters.

“We expect Kashagan to come on stream shortly. The volume of crude to be produced hinges on the period of repairs currently under way. Our estimates stand at about 2 million tons for 2014”, Tengrinews.kz reported mid-January 2014, quoting the country’s Oil and Gas Minister Uzakbai Karabalin as saying at a press-conference following the sitting of KAZENERGY petroleum association.