Commercial production at Kashagan to start in October: oil and gas minister

Commercial production at the giant Kashagan oilfield is to start as early as in October, KazTAG reports, citing the country’s newly appointed oil and gas minister Uazakbai Karabalin as saying. “The project is 98% complete. We have inspected the readiness of the artificial islands that are home to drilling equipment. Hopefully, the commercial production will start this coming October”, the minister said while on a working tour round Atyrau oblast, a major oilbearing area in the West of Kazakhstan. “We have seen the subcontractors working actively. The findings of the equipment pilot tests instill hope. We are looking forward to a successful year”, Mr. Karabalin said. According to the previous oil and gas minister, Mr. Sauat Mynbayev, the commercial production was to start in Septemeber. 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 2012 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. NCOC, a consortium developing the giant Kashagan oilfield, plans to produce 75 000 barrels of oil per day at the initial production stage, Tengrinews.kz reported mid-May 2012, citing NCOC Vice Managing Director Zhakyp Marabayev as saying on the sidelines of a CIS summit on oil and gas. According to him, plans are there to bring the production figure up to 350 000 barrels a day or even up to 450 000 barrels a day at the first stage of the oilfield development. “The current facilities enable to produce up to 350 000 barrels a day (…) Should the gas injection capacities be expanded, we could produce up to 450 000 barrels a day”, he said at that time. ConocoPhillips will sell its 8.4-percent stake in Kashagan to KazMunaiGas for $5 billion, Tengrinews.kz reported July 3, citing the company’s official website.