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Commercial production at giant oilfield Kashagan to start in spring 2013

28 august 2012, 11:11
0
Kashagan oil field. ©REUTERS
Kashagan oil field. ©REUTERS
Commercial production at the giant oilfield Kashagan has been postponed from December to spring 2013, KazTag reports, citing Agip KCO Managing Director Umberto Carrara.

“Most likely the commercial production will start before June after the ice at the Caspian Sea is gone”, he said during the visit of the Atyrau oblast governor Baktykozha Izmukhambetov to the oilfield.

According to him, the decision was taken not to start the production amidst severe winter conditions.
The PSA allows to start the commercial production as early as in October 2012.

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. The consortium developing the field comprises Eni, Shell, ExxonMobil, Total and KazMunaiGaz (all with a 16.81% stake) as well as ConocoPhillips (8.4%) and Japan's Inpex (7.56%).

Tengrinews.kz reported late May that Kazakhstan and NCOC companies had signed an agreement to start commercial production at the giant Kashagan oilfield in the period from December 2012 to June 2013.

In particular, the sides agreed to finance KazMunaiGas’ share of investments in 2012-2013 out of the consortium’s funds; to sign an agreement between KazTransGas and the participating companies on sales of Kashagan gas to make sure 83% of the gas is supplied to the internal market before 2041.

According to KMG, the Company plans to invest $8 billion into the project before 2014, with the total of investments into a range of projects standing at $20 billion.

Earlier Tengrinews.kz reported that KazMunaiGas National Oil and Gas Company would obtain a loan of $4 billion out of the National Oil Fund to finance the Kashagan oilfield development project.

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