Around the world news media have reported that the giant Kashagan oilfield offshore Kazakhstan will start to produce oil before October 1st. Kashagan is the world’s biggest crude discovery in the last 40 years, with estimated resources (Oil Original In Place – OOIP) of 35 billion barrels and the recoverable reserves will be 9-13 billion barrels. (The world consumes 31 billion barrels per year.) It has been very difficult to start the production and the project is now delayed eight years and the costs have reached $48 billion, more than double early estimates. The problem with the field has been that the water depth just is been 3-6 meters and the only option for the production has been to make a man-made island.
A total of 40 wells are planned for the production from Kashagan. The first phase entailed the completion and operation of offshore and onshore facilities with capacity to produce as much as 180,000 barrels per day from 20 wells. Phase 2 will involve completion of remaining facilities that will increase production to 370,000 barrels per day. Currently these facilities are mechanically completed and under commissioning. During this phase of Kashagan production, about half the produced gas will be reinjected into the reservoir. Separate pipelines will carry produced liquids and raw gas to the Bolashak plant, which will treat oil for export. Some of the processed gas will be returned to the field to fuel operations, and some will fuel the onshore plant.
The Kashagan oilfield spans an area of 75 km by 45 km and lies at 4,200 m in 3-6 m of water about 80 km offshore Atyrau in the northern part of the Caspian Sea. Exxon Mobil Corp. (XOM), Royal Dutch Shell Plc (RDSA), Total SA (FP) and Eni SpA (ENI) each holds 16.81 percent in the project. Japan’s Inpex Corp. (1605) owns 7.56 percent. State-owned KazMunaiGaz National Co. retains 16.88 percent.
China National Petroleum Corp. this month bought an 8.33 percent holding from KazMunaiGaz. Kazakhstan had earlier exercised a preemptive right to buy out ConocoPhillips (COP)’ 8.4 percent share to block a sale to India’s Oil & Natural Gas Corp.
Aleklett's Energy Mix 
September 13th, 2013 → 2:40 pm
[…] Det faktum att man nu börjar producera olja från Kashagan och att vi nu vet att projektkostnaderna är 48 miljarder dollar finns det anledning att titta på en rapport som Goldman Sachs presenterade i mars 2012, ”360 projects to change the world”. Man har studerat hur mycket olja och gas som de olika projekten planeras leverera och den mycket intressanta uppgiften om vilket pris som behövs för att projekten skall vara lönsamma. Det faktum att alla nya projekt behöver finansiärer medför att nya projekt är väl dokumenterade. Det medför också att det är möjligt att göra denna analys, som kan betraktas som den optimala nya oljeproduktionen för framtiden. En viktig slutsats som man gör är att OPEC inte kommer att generera ny reservkapacitet inför en framtida ekonomisk återhämtning. […]
September 16th, 2013 → 12:28 pm
[…] The fact that they have now begun to produce oil from Kashagan and that we know the project costs are $48 billion gives me reason to look at a report that Goldman Sachs presented in March 2012, ”360 projects to change the world”. They have studied how much oil and gas the various projects are planned to deliver and the very interesting information on what oil price is needed for the projects to be profitable. The fact that all new projects need financiers means that new projects are well documented. This also makes it possible to do this analysis. The analysis can be seen as one of optimal possible new future oil production. An important conclusion one makes is that OPEC will not generate any new reserve capacity before a future economic recovery occurs. […]