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Kazakhstan Oil Field Kashagan Set to Start this Week

Kazakhstan Oil Field Kashagan Set to Start this Week
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Δευ, 9 Σεπτεμβρίου 2013 - 18:25
The giant Kashagan oil field in Kazakhstan could produce its first oil as soon as Tuesday, according to people familiar with the matter, marking the end of a near-decade of delays and cost overruns that has marred the progress of one of the world's largest energy projects.
The giant Kashagan oil field in Kazakhstan could produce its first oil as soon as Tuesday, according to people familiar with the matter, marking the end of a near-decade of delays and cost overruns that has marred the progress of one of the world's largest energy projects.

"We are very, very close. It could happen tomorrow or some other day this week," said Hans Wenck, head of communications for the North Caspian Operating Company. "We are extremely close to the start of production in the next few days."

The NCOC is conducting final checks on equipment to make sure it is ready to take the first oil from the ground, Mr. Wenck said.

A person familiar with the situation told The Wall Street Journal that production would likely start Sept. 10.

Kashagan was first discovered in 2000 and was initially planning to begin producing oil in 2005, for a total development cost of $10 billion. However, numerous technical setbacks delayed the project and pushed the cost up to more than $40 billion.

Daily output at the field, which has been beset by delays, is expected to reach 370,000 barrels by the end of 2015, a top official at operator Eni SpA (E) had said previously.

Kashagan and neighboring fields in the North Caspian Sea hold estimated reserves of some 35 billion barrels of oil in place.

Kashagan is a joint venture between Kazakh state energy company KazMunaiGaz, Eni SpA (E), ExxonMobil Corp. (XOM), Royal Dutch Shell PLC (RDSA), France 's Total SA (TOT), Japan 's Inpex (1605.TO).

China National Petroleum Corp. at the weekend bought into the Kashagan field. The Kazakh government, which had just bought ConocoPhillips' 8.4% interest in the project, sold a similar sized stake to the Chinese state-owned company for an identical $5 billion.

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