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Suspended production at Kashagan may disrupt Kazakhstan’s plan of producing 82 million tons of crude in 2013

31 october 2013, 17:07
Suspension of production at the giant Kashagan oilfield may disrupt Kazakhstan’s plan of producing 82 million tons of crude in 2013, Interfax-Kazakhstan reports, citing a source in the country’s Oil and Gas Ministry.

“Kazakhstan planned to produce around 82 million tons of crude, including a certain volume procured from Kashagan. The commercial production started in September. However, due to a gas leakage the production is behind the schedule, which may disrupt the yearly production plan target”, the Agency reports.

“The Ministry is doing its best to make sure the production figure is brought to 82 million tons”, according to the source, elaborating that plans are there to produce 16.2 million barrels at Kashagan by the end of the year.
“Due to the delays, the estimated production figure is expected to be lower than planned (…) however, tax proceeds from the oil industry are accumulated solely in the National Oil Fund; thus, sales of Kashagan crude will have no effect on the country’s budget”, the source said.

“Resumption of production at Kashagan is being delayed (…) time is needed to ensure safety of all the oilfield’s production infrastructure components (…) currently experts are working to find out the causes of the leakage. After the causes are defined, the timing of the repairs work will be announced more precisely”, according to the source.

"Small content of gas in the air was discovered during a regular check on October 9, 2013 at one of the sections of the gas pipeline from island D to Bolashak oil refinery located 2 km away from the field," NCOC, the project’s operator, reported earlier. All the production operations were suspended, including the wells, until the gas leak is found and sealed. Initially it was announced that the work would not take more than a couple of days, but the operation has not been resume since.

Kashagan, a gigantic offshore oil and gas field in Kazakhstan's section of the Northern Caspian Sea, started producing oil on September 11, 2013.

But the production was halted shortly after, on September 24, because a gas leak was discovered during a routine check of the ground gas pipeline Kashagan - Bolashak. Then another leak was discovered a fortnight later. According to the consortium the pipeline problem was not going to affect the start of the commercial oil production at Kashagan.

Earlier Tengrinews.kz reported that the level of commercial production of 75 000 barrels a day is to be reached by early October 2013, adding that Kazakhstan plans to produce 1.5-3 million tons of crude at Kashagan in 2013.

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 China National Petroleum Company (8.33%) and Japan's Inpex (7.56%).

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