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Standard & Poors no longer takes Kashagan into account when assigning ratings to Kazakhstan 20 октября 2015, 15:50

The project is likely to be regarded as ad addition to the current economic growth model that has been recently shaped: S&P’s Associate Director Karen Vartapetov.
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International rating agency Standard & Poors (S&P) has excluded the giant oilfield Kashagan located in the Caspian offshore out of the factors influencing Kazakhstan’s economic prospects due to repeatedly delayed commercial production at the oilfield, according to Karen Vartapetov, S&P’s Associate Director.

 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.

“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 (…)”, the country’s Oil and Gas Minister Uzakbai Karabalin told a briefing July 30, 2014.

“We are no longer upbeat when it comes to this project (…) as it has been repeatedly delayed. The project is likely to be regarded as ad addition to the current economic growth model that has been recently shaped. We are no longer taking this oilfield into account in the rating procedures”, Karen Vartapetov said October 20, at the annual S&P’s conference.

 “Given the repeated delayes, we believe the oilfield if beyond the rating horizon, that is two years away (…) However, should the situation develop more positively, we might consider the underlying factors for the rating process”, he added.

 According to him, “S&P believes the oilfield will resume commercial production not earlier than in 2018. (…) this the year when Kashagan is expected to reach its full production capacities, adding another 20-25% to the crude produced in Kazakhstan”, he said.

 Kazakhstan still plans to resume commercial production of oil at the suspended giant Kashagan oilfield in the Caspian offshore at the end of 2016, the country’s First Vice Minister of Energy Uzakbai karabalin told  a briefing September 9, 2015.

 “There have been no changes in the plans (…) as of today the main task is to replace the pipelines running from the artificial island to the treatment facilities based on the shore of the Caspian Sea. A total of 99 km of pipes have been produced in Germany and Japan, with 67.5 km of them already delivered to Kazakhstan. 26 km of pipes have already been laid. The work is in full swing”, he said.

 Kazakhstan’s Government will not be compensating the international consortium of companies developing the giant Kashagan oilfield for expenses related to replacement of faulty pipes, the country’s Prime Minister Karim Massimov announced mid-June 2015.

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 &lsquosour gas&rsquo 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 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.

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