Kazakhstan

The World’s Largest Offshore Oil Field Is Back In Action

19 Sep 2017   Kazakhstan

Without much international fanfare, the world’s largest offshore oil field and the largest discovered in the last 40 years, Kazakhstan’s Kashagan Field, is on the verge of finally moving beyond the manifold impediments that hindered its development. Discovered in 2000, the 13 Bbbl field (38 Bbbl of oil in place) was set to begin producing in 2005, however, the first start took place only in 2013 . The joy lasted for a mere three months, then a pipeline leak on one of the artificially created islands led to a three-year production hiatus. Yet last autumn, Kashagan was producing oil again. In the absence of any further disturbances, it’s set to gradually ramp up to join the world’s Top-3 highest producing oil fields by 2035. Much of Kashagan’s past problems boil down to the technicalities of the oil field itself. It’s located in a climatically volatile region where temperatures range […]

Kazakhstan Bows Out Of OPEC Deal

12 Jul 2017   Kazakhstan, OPEC

Energy Minister Kanat Bozumbayev said at an industry conference in Istanbul over the weekend that Kazakhstan’s withdrawal from its pledge to the cap will take place gradually, Russian news agency TASS reported . Last November, members of OPEC and other oil-producing nations thrashed out an agreement to collectively reduce their daily output by 1.8 million barrels as compared to production in late 2016. The same countries later agreed to extend the deadline for that cap to March 2018 in a desperate bid to prop up prices. Asked if Kazakhstan would be prepared to consider a further extension during OPEC talks in November, Bozumbayev was evasive, answering only that “this is a question for November.” But the data on Kazakhstan so far shows Astana never really had its heart in it, and Bozumbayev even admitted the country’s oil output for 2017 will outshoot the previous projected volume of 81 million […]

Kazakhstan ‘hugely’ important to oil and gas industry

22 Jun 2017   Kazakhstan

The head of the oil and gas division of GE says Kazakhstan has a significant role to play in global energy industries. Photo courtesy of the North Caspian Operating Company June 21 (UPI) — Kazakhstan, with its strategic trade position and strong energy portfolio, is “hugely” important to the global energy sector, a director at GE Oil & Gas said. General Electric hosted a forum in the Kazakh capital of Astana to focus on emerging regional trends in the transportation and energy industries. Lorenzo Simonelli, the head of the company’s oil and gas division, said Kazakhstan is the ideal place for a global discussion on those industries. “Rich in resources and a key trade corridor, Kazakhstan and the broader Central Asia region are hugely important to the global oil and gas industry,” he said in a statement . Oil is Kazakhstan’s primary export commodity and the country is party […]

No change in oil production plans, Kazakh oil company says

14 Jun 2017   Kazakhstan

Crude oil production from Kazakhstan could increase by the end of the year once operations at its Kashagan oil field are optimized. Photo courtesy of North Caspian Operating Company. June 13 (UPI) — Kazakhstan, a party to an OPEC-led market balance agreement, has no plans to modify its production plans, a spokesperson for an energy company said. Kazakhstan, under the terms of an agreement coordinated by the Organization of Petroleum Exporting Countries, sidelined about 20,000 barrels per day. It’s one of a handful of Central Asian producers contributing to a deal to balance an oversupplied market with managed declines in output. During the weekend, Russia news agency Tass reported that Kazakhstan had agreed to compensate for the expected increase in production from its giant Kashagan oil field so it doesn’t violate the terms of the OPEC-led effort. A spokesperson for the North Caspian Operating Co., a consortium managing Kashagan, […]

More oil expected from Kazakhstan

13 May 2017   Kazakhstan

Kazakhstan could add at least another quarter million barrels of oil per day to the market through new field development, a country assessment found. The U.S. Energy Information Administration updated its country profile for Kazakhstan, noting the landlocked Central Asian country last year reached major milestones with oilfield developments. In October, the giant Kashagan field resumed production following several years of delays. At its peak, Kashagan should produce at least 370,000 barrels per day. In July, a consortium managing the Tengiz reservoir “decided to proceed with expansion plans that should increase liquids production at the Tengiz project by about 260,000 bpd beginning in 2022,” the EIA’s assessment read. Kazakhstan is one of the 12 producers outside of the Organization of Petroleum Exporting Countries that agreed […]

KBR hired as consultant by Kazakh oil producer

3 Mar 2017   Kazakhstan

U.S. engineering services company KBR said it secured a contract for conceptual studies for oil field basins located in the Kazakh waters of the Caspian Sea. The North Caspian Operating Company, working on behalf of a consortium of producers, secured KBR’s services for conceptual studies and engineering work for offshore basins, including the giant Kashagan oil field. “Our Caspian team is excited to provide fresh and cost effective ideas to NCOC with a commitment of maximizing local content,” Jay Ibrahim, KBR’s regional president, said in a statement . Production at Kashagan, which holds an estimated 16 billion barrels of oil, was halted in October 2013, less than a month after it started, when a pipeline associated with the […]

Oil production from Kazakhstan on the rise

24 Feb 2017   Kazakhstan

Production from part of Kashagan oil field in the Kazakh waters of the Caspian Sea should reach capacity by the end of the year, an operating company said. According to the economists at the Organization of Petroleum Exporting Countries, Kazakhstan was producing around 1.38 million barrels of oil per day last year with the main share of growth coming from Kashagan. The North Caspian Operating Co., a joint venture operating the giant oil field in the Kazakh waters of the Caspian Sea, confirmed to UPI that production from Kashagan was holding steady at 160,000 bpd and production would accelerate to 180,000 bpd in the coming months. Once secondary production methods are optimized to increase pressure in the reservoir, […]

Milestone reached for Kashagan oil field

14 Jan 2017   Kazakhstan

More than 7 million barrels of oil produced and exported from the Kashagan oil field off the coast of Kazakhstan since late 2016. Photo courtesy of the North Caspian Operating Company. ASTANA, Kazakhstan, Jan. 13 (UPI) — More than 7 million barrels of crude oil have been produced safely from the Kashagan oil field in Kazakhstan since September, the operator said. The North Caspian Operating Co., a joint venture operating the giant oil field in the Kazakh waters of the Caspian Sea, announced Friday it’s produced 7.3 million barrels of crude oil and an ultra-light form of oil called condensate since production resumed in late 2016. The consortium added that volume was exported to the foreign market. Production at Kashagan, which holds an estimated 16 billion barrels of oil, was halted in October 2013, less than a month after it started, when a pipeline associated with the field cracked […]

Kazakh President Says Partners in Shell Oil Field Face Tax Claim

25 Nov 2016   Kazakhstan

Kazakhstan’s authorities are looking at whether the Karachaganak oil and gas venture, which includes Royal Dutch Shell Plc and Eni SpA, has unpaid taxes. “The tax authorities have tax issues — they didn’t pay,” President Nursultan Nazarbayev said in an interview on Tuesday in Astana, without elaborating. He also confirmed the government is now seeking to change how revenue from the field is shared with the companies, which is allowed by the terms of the contract. The Karachaganak project, the third-largest in the country, has provoked a number of disputes between the government and international companies. In 2012, the partners in the venture sold part of their stakes to state-run KazMunaiGaz National Co. JSC, settling a more than two-year dispute with the government over how they paid tax and recovered costs. Within the past year, Kazakh authorities have sought a greater share of the profits from the project and […]

Commercial production started at giant Kashagan oil field

22 Nov 2016   Kazakhstan

Commercial production from the giant Kashagan oil field in the Caspian waters of Kazakhstan has begun, a spokesperson for a regional operating company said. Production at Kashagan, which holds an estimated 16 billion barrels of oil, was halted in October 2013, less than a month after it started, when a pipeline associated with the field cracked open. Ainash Chengelbayeva, a spokesperson for the North Caspian Operating Company, said in response to emailed questions the field was now up and running. “We confirm today’s announcement of the Ministry of Energy of the Republic of Kazakhstan that commercial production has begun at the Kashagan field in the Caspian Sea,” she said. A year ago, the […]

Kazakhstan’s Kashagan Produces 201,000 Tons Of Oil In October

15 Nov 2016   Kazakhstan

Kazakhstan’s Kashagan oil field produced about 201,000 tons of oil in October, its first full month of operation, data from the Energy Ministry’s analytical center showed. MOSCOW, Nov 14 (Reuters) – Kazakhstan’s Kashagan oil field produced about 201,000 tons of oil in October, its first full month of operation, data from the Energy Ministry’s analytical centre showed on Monday. Energy majors developing the giant Caspian field started test pumping in September and exports of small volumes began last month but the companies and the government are yet to announce the start of stable commercial output. The October output figure is the equivalent of daily production of 52,600 barrels, while Kazakh officials have said that in order to reach commercial output the field needs to achieve stable production of at least 75,000 barrels per day. The field off Kazakhstan’s Caspian coast has cost about $55 billion to develop, according to […]

Kashagan crude oil ready for exports

15 Oct 2016   Kazakhstan

The first batch of crude oil from the giant Kashagan oil field off the coast of Kazakhstan has been processed and is destined for exports, an operator said. “North Caspian project operator, the North Caspian Operating Co., announces that, as an intermediate objective in its start-up and commissioning activities, it has commenced production from the Kashagan Phase 1 offshore project, and the onshore processing plant has dispatched the first batch of crude oil destined for export,” the company said in a statement . Low crude oil prices, about 50 percent less than when Kazakhstan’s economy was more robust two years ago, and contractions in trading partners China and Russia […]

Oil From $50 Billion Kashagan Field Starts Flowing to Export

14 Oct 2016   Kazakhstan

Giant Kazakh deposit pumps crude for export to world markets Offshore, onshore commissioning work continues at Kashagan Kashagan, a vast oil field in the Caspian Sea, sent its first crude for export, after about 16 years in development and more than $50 billion of investments. The venture loaded 26,500 metric tons of crude for export into the country’s pipelines, Kazakhstan’s Energy Ministry said in an e-mailed statement. Of that, 7,700 tons was sent to the Caspian Pipeline Consortium. Reaching stable production will take “some time” as commissioning work continues both offshore and onshore, the ministry said. The project has been plagued by multiple delays and cost overruns. A 2008 budget estimate of $38 billion jumped to $53 billion by the end of last year as the partners replaced undersea links after sour gas cracked the pipes. The crude from Kashagan is reaching an already saturated market, with prices at […]

Oil Production Starts At Giant Kashagan Field

14 Oct 2016   Kazakhstan

Commercial-scale production at Kazakhstan’s giant Kashagan field in the Caspian Sea has started at a daily rate of 90,000 barrels, the country’s Energy Minister Qanat Bozumbaev said . The field is operated by a consortium including Exxon, Shell, Eni, Total, CNPC, and Japan’s Inpex, along with Kazakh state oil company Kazmunaygaz. Kashagan, the biggest oil discovery in Kazakhstan in about four decades, holds an estimated 38 billion barrels of crude and a trillion cubic meters of natural gas. Of the oil reserves, 10 billion barrels are recoverable. The field was first put into operation three years ago, but just a month later production was suspended because of a gas leak. An inspection revealed the whole 200-km stretch of pipelines set to transport oil and gas from Kashagan needed to be replaced because of micro-cracks, the result of high-sulfur associated gas running through them. Kazakhstan is the largest oil producer […]

World’s Most Expensive Oil Project Could Finally Come Online

15 Sep 2016   Kazakhstan

One of the world’s largest oil projects could soon come online, bringing a rush of new supply that could delay the oil market balance. The Kashagan oilfield is years behind schedule, but the massive project could soon begin operations. Located it the Caspian Sea in Kazakhstan, the oil field was supposed to come online a decade ago, but the uniquely complex project has bedeviled its owners – Eni, Exxon, Shell, Total and the Kazakh government. The field has a price tag north of $50 billion, raising questions about how and if the companies will ever be paid back. First things first – the operators must bring the field into operation. In October, that objective could finally be realized. The companies estimate that Kashagan could result in 370,000 barrels per day coming online within the next year, which, if true, could delay the balancing of the global oil market. The […]

Vast Kazakh Oil Field Seen Taking Another Decade to Reach Target

14 Sep 2016   Kazakhstan

Kashagan won’t hit Eni’s 2017 output goal until 2020s: WoodMac OPEC heeds Eni’s forecast, raising its non-OPEC supply outlook Kazakhstan’s giant Kashagan oil field has taken 16 years and more than $50 billion to bring to the verge of production. It could take another decade to reach its potential, with initial output at half the forecast level. Eni SpA, working with partners Royal Dutch Shell Plc, Total SA and the Kazakh state, expects Kashagan to start in October and pump 370,000 barrels a day within a year. Consulting firm Wood Mackenzie Ltd. contends the field will produce only about 154,000 barrels a day in 2017 and won’t get anywhere near targeted volumes until the next decade. “It will take time to reach production capacity,” Samuel Lussac, WoodMac’s research manager for Russia, said in an interview. “We don’t expect Kashagan Phase 1 to produce more than 300,000 barrels a day […]

Exclusive: New Caspian fields to add at least 200,000 bpd to oil market by year-end

 Two major Caspian Sea oil fields scheduled to come on stream this year will together produce at least 200,000 barrels of crude per day (bpd) by the end of 2016, according to industry sources and a loading schedule seen by Reuters. The production plans, for the Kashagan field in Kazakhstan’s sector and Lukoil’s Filanovsky field in the Russian sector, are the clearest sign yet that significant volumes from the projects will be going imminently on to a world market that already has a glut of supply, possibly pushing down prices. By the end of next year, according to targets previously announced by the fields’ operators, Kashagan and Filanovsky will between them produce about 500,000 bpd, equivalent to about 0.5 percent of […]

Chevron, Exxon Commit to $36.8 Billion Expansion Project in Tengiz

6 Jul 2016   Kazakhstan

The investment in the expansion of the field known as Tengiz—one of the world’s largest—comes on top of around $37 billion already spent by Chevron, the operator, and its partners: state-owned energy firm KazMunaiGas, Exxon and Russia’s Lukoil . LUKOY 1.41 % “This project builds on the successes of prior expansions at Tengiz and is ready to move forward,” said Jay Johnson, Chevron’s executive vice president in charge of upstream. “It has undergone extensive engineering and construction planning reviews and is well-timed to take advantage of lower costs of oil industry goods and services,” he said in a statement. The $36.8 billion includes $27.1 billion for facilities, $3.5 billion for wells and $6.2 billion for contingencies. It will take Tengiz production up to 1 million barrels of oil equivalent a day from around 800,000 […]

Chevron, Exxon Commit to $36.8 Billion Expansion Project in Tengiz

5 Jul 2016   Kazakhstan

The investment in the expansion of the field known as Tengiz—one of the world’s largest—comes on top of around $37 billion already spent by Chevron, the operator, and its partners: state-owned energy firm KazMunaiGas, Exxon and Russia’s Lukoil . LUKOY 1.41 % “This project builds on the successes of prior expansions at Tengiz and is ready to move forward,” said Jay Johnson, Chevron’s executive vice president in charge of upstream. “It has undergone extensive engineering and construction planning reviews and is well-timed to take advantage of lower costs of oil industry goods and services,” he said in a statement. The $36.8 billion includes $27.1 billion for facilities, $3.5 billion for wells and $6.2 billion for contingencies. It will take Tengiz production up to 1 million barrels of oil equivalent a day from around 800,000 […]

Chevron Approves $37 Billion Expansion of Kazakh Oil Project

5 Jul 2016   Kazakhstan

Chevron Corp. has decided to go ahead with the $36.8 billion expansion of the Tengiz oil project in Kazakhstan. The company and its partners will spend $27.1 billion on facilities, $3.5 billion on wells and $6.2 billion for contingency and escalation, it said it a statement on Tuesday. First oil from the expanded project is planned for 2022. Tengiz “has undergone extensive engineering and construction planning reviews and is well-timed to take advantage of lower costs of oil industry goods and services,” Jay Johnson, executive vice president for upstream at Chevron, said in the statement. The expansion will increase production of crude oil in the field by 260,000 barrels a day. The project’s total hydrocarbon output will rise to about 1 million barrels of oil equivalent per day, according to the statement. Exxon Mobil Corp. owns 25 percent of the venture, KazmunaiGaz National Co. 20 percent and Russia’s Lukoil […]

Chevron Deadline Nears for $40 Billion Bet on Next Decade’s Oil

1 Jul 2016   Kazakhstan

Kazakhstan expansion would add a Libya of new supply Tengiz is only major new project on Chevron’s 2016 agenda Chevron Corp. may shortly give a green light to the most expensive oil project in the world this year as the industry digs out from the worst slump in a generation. The company said this week in a presentation on its website that the decision on expanding the Tengiz development in Kazakhstan will be made in mid-2016. Installing 4,500 camp beds for construction crews is done and port dredging 25 percent complete, it said. The project may cost as much as $40 billion and add crude supply equivalent to that of Libya. The investment was put on hold last year after cost estimates ballooned amid plunging oil prices. In a May interview, Kazakh Energy Minister Kanat Bozumbayev predicted a late-June approval and estimated the cost at $36 billion to $37 […]

Why Chevron Is Investing $37B In The World’s ‘’Most Difficult Oil’’

27 May 2016   Kazakhstan

Tengiz Oil Field I wrote Wednesday about Australia’s Oil Search making a major $2.2 billion investment in Papua New Guinea natural gas. Noting this as a sign the right projects are still getting financed in the global oil and gas space. And later that day, we got news of a new mega-deal in the petroleum investment space. One that comes at a ten-fold larger scale. That came from U.S. major Chevron. Which the Wall Street Journal reported Wednesday will lead a consortium investing a stunning $37 billion in one single project — located in a completely unexpected part of the world. Offshore Kazakhstan. The Journal cited Kazakhstan’s energy minister, Kanat Bozumbayev, as saying the massive investment will come from Chevron and partners ExxonMobil, Lukoil and Kazakhstan state firm KazMunaiGas. With the target being an expansion of the Tengiz oil field , located in the Kazakh Caspian Sea. Energy minister […]

Kazakh Energy Minister Says Chevron-led Consortium to Invest Up To $37 Billion in Oil Field

25 May 2016   Kazakhstan

A Chevron Corp.-led consortium is set to invest up to $37 billion as it increases output at a giant oil field in Kazakhstan, the country’s energy minister Kanat Bozumbayev said in an interview Wednesday. The investment represents a rare big commitment by a large oil company to spend on new production during a nearly two-year long slump in crude prices. Companies have been forced to delay or cancel about $270 billion in projects through March since oil prices began their long slide, according to Rystad Energy, including expensive Arctic developments. The Kazakh project, called Tengiz, is one of the world’s biggest oil fields and a key source for Chevron’s growth in crude output in the next few years. Investment would start in 2017 and the project would add 24,000 jobs in Kazakhstan, Mr. […]

The Trouble With Sovereign-Wealth Funds

23 Dec 2015   Kazakhstan

Kazakhstan’s $55 billion sovereign-wealth fund helped pull the country through the global financial crisis and offered funding for the country’s bid to host the 2022 Winter Olympics. But the collapse in oil prices has hit Kazakhstan and its fund, Samruk-Kazyna JSC, hard. In October, the fund borrowed $1.5 billion in its first syndicated loan to help a cash-strapped subsidiary saddled with a troubled oil-field investment. “Our oil company lost lots of its revenues,” says the fund’s chief executive, Umirzak Shukeyev. “Currently, we are trying to adjust to the situation.” Funds like Samruk are at a critical juncture. For years, sovereign-wealth funds—financial vehicles owned by governments—swelled in size and number, fueled by rising oil prices and leaders’ aspirations to increase economic growth, invest abroad and boost political influence . A new wave of sovereign funds came from African countries like Ghana and Angola. Asian nations joined in with funds like […]

Iran Seeks Arrangement to Send Enriched Uranium to Kazakhstan

9 Dec 2015   Iran, Kazakhstan

The U.S. is helping Iran with an arrangement to send part of its nuclear fuel stockpile to the Central Asian nation of Kazakhstan, a step that would speed the lifting of international sanctions on Tehran, according to people involved in the discussions. The arrangement, which is still being negotiated and hasn’t been previously disclosed, could resolve a major obstacle to implementing the nuclear deal reached in July between Iran and six world powers. U.S. and Iranian officials say they hope that deal, which grants Iran sanctions relief in exchange for limits on its nuclear activities, can take effect as soon as next month. Iranian President Hassan Rouhani’s government is eager for sanctions relief as soon as possible to boost their economy ahead of elections set for February, Western officials say. There are fears that opposition to the nuclear deal in Iran could grow if sanctions aren’t lifted quickly, according […]

Kazakhstan Moves to Rein In Speculators as Premier Faces $30 Oil

9 Dec 2015   Kazakhstan

Kazakhstan stepped up measures to limit speculation on the tenge, the world’s worst currency, as the government braced for further declines in the price of oil. “Currently, we are working to stabilize the money market and remove speculation,” central bank Governor Daniyar Akishev told a cabinet meeting in Astana today. “The next stage will be widening of instruments to provide liquidity to banks to lend to the economy.” Trading of the tenge will require a minimum amount to change the currency’s price and the bourse will show only the five best bid-ask quotes from Dec. 15, the exchange said on its website. The changes will increase the cost of taking speculative positions, the central bank said. The tenge slipped 0.3 percent to 308.03 against the dollar and is down 41 percent this year, the biggest decline worldwide. Kazakhstan, the largest oil producer among former Soviet republics after Russia, shifted […]

Kazakhstan: No changes on Kashagan

30 Sep 2015   Kazakhstan

There are no changes in the operational plans for the giant Kashagan oil field off the coast of Kazakhstan, the country’s deputy energy minister said. Kazakh Deputy Energy Minister Uzakbai Karablin told an audience at an investment conference in the capital Astana commercial production from the field was expected about six weeks after operations are slated to begin in late 2016. “All the work was planned for this period, and there are no changes for now,” he was quoted by the regional Trend news agency as saying. Kashagan is among the largest oil fields in the world, with an estimated 16 billion barrels of oil reserves. Production was halted in October 2013, less than a month after it started, when a […]

Russia’s Lukoil sells China its stake in Kazakh oil producer

22 Aug 2015   China, Kazakhstan, Russia

 Russia’s Lukoil said it sold its stake in a Kazakh oil producer to a rival in Beijing just as China’s economy falters and Kazakhstan’s gets a $1 billion loan. The Russian company said it sold its 50 percent in oil producer Caspian Investments Resources to Sinopec, a rival company based in China, for $1 billion, giving the Chinese oil company full control . The Caspian producer plays a role in the development of five separate fields in Kazakhstan. Lukoil said cumulative production since 2006 has amounted to 95 million barrels of crude oil and around 1 billion cubic feet of natural gas. The investment from Sinopec comes amid a slowdown in the Chinese economy. To stave off declines, the Chinese government devalued the national currency. This […]

Kazakhstan floats tenge, currency tumbles

20 Aug 2015   Kazakhstan

Kazakhstan’s under-pressure tenge lost more than a quarter of its value on Thursday after the oil producing central Asian nation, hit by a sharp fall in world crude prices, introduced a freely floating exchange rate for the currency. Acting against a backdrop of devaluation and depreciation in the currencies of some of its major trading partners and rivals, Kazakhstan’s government and central bank said the country’s economic policy would henceforth be based on inflation targeting. “This is not a devaluation, this is a transition to a freely floating rate when the market itself determines a balanced exchange rate on the basis of demand and offer,” central bank Governor Kairat Kelimbetov told a news conference broadcast from the capital Astana. The official tenge rate tumbled by 26.2 percent to 255.26 per dollar on the Kazakhstan […]

Yuan Ripples Reach Kazakhstan as Tenge Tumbles Most Since 2014

19 Aug 2015   Kazakhstan

Kazakhstan allowed its tenge to weaken the most since a devaluation 18 months ago, signaling Central Asia’s biggest crude exporter wants to adjust to declines in the currencies of its top trading partners, China and Russia. The tenge declined 4.4 percent to 197 per dollar by 2:29 p.m. in Almaty. That was the steepest retreat since February 2014 when the central bank, which uses its foreign-currency reserves to manage the exchange rate within a trading band versus the dollar, depreciated it by about 20 percent. Central bank representatives weren’t available to comment when contacted by Bloomberg. Pressure is mounting on countries that trade with China to let their currencies weaken after the yuan slide last week made their exports less competitive. Kazakhstan has also suffered from oil’s 22 percent retreat in the past two months, especially since its northern neighbor and trading partner Russia is allowing the ruble to […]

Ukraine considers Kazakh gas transit options

18 Jul 2015   Kazakhstan, Ukraine

 Trade agreements with Kazakhstan may include the possibility of receiving natural gas shipments sent through the country, Ukraine’s government said. The Ukrainian government said Friday it was working to develop trade and economic deals with Kazakhstan. Arrangements were drafted during bilateral economic sessions attended by deputy ministers on both sides. Kiev said the terms of the agreement call on representatives from each country to examine the potential for energy cooperation. “The participants of the meeting also agreed to study the issue of supply to Ukraine of Kazakhstan natural gas and transit through the territory of Kazakhstan of Turkmen and Uzbek natural gas,” the Ukrainian government said in a statement. An April report from the International Energy Agency said a more liberalized energy sector […]

Kazakhstan hosts oil-spill roundtable

25 Apr 2015   Kazakhstan

The government in oil-rich Kazakhstan hosted a roundtable discussion on developing a regional response to spills, the OSCE said Friday. The Organization for Security and Cooperation in Europe in coordination with the Kazakh Energy Minister and the U.S. Embassy in Kazakhstan organized a discussion on how best to plan a regional response to an oil spill program. “Once approved, the regional oil spill plan will be an important tool to ensure that the regional authorities have a system that will ensure effective co-ordination and integration of all relevant resources both from government and private sectors,” Peter Taylor, a manager for the regional oil spill response organization, said in a statement. The roundtable brought more […]

Kazakhstan expects oil production boom

26 Feb 2015   Kazakhstan

Kazakhstan’s government said Wednesday it expects oil production to increase by as much as 30 percent in part because of operations at its giant Kashagan field. Kashagan is among the largest oil fields in the world, with an estimated 16 billion barrels of oil reserves. Production was halted in October 2013, less than a month after it started, when a pipeline associated with the field cracked open. Kazakh Deputy Energy Minister Uzakbai Karabalin told reporters the government in Astana is determined to increase production despite a series of setbacks. “Oil output is expected to reach 630 million barrels in 2017 and 760 million barrels in 2020,” he said. “This increase will be due to the expansion project at [onshore oil field] Tengiz and resumption of offshore oil production at Kashagan.” Kazakh production […]

Lukoil Seeks Damages From Sinopec Over $1.2 Billion Kazakh Deal

10 Feb 2015   Kazakhstan

OAO Lukoil is seeking damages from China Petroleum & Chemical Corp. through arbitration proceedings in London, saying the Chinese company breached an agreement to buy 50 percent of a Kazakh oil producer for about $1.2 billion.  Sinopec, as the Chinese producer is known, failed to complete a deal agreed April 15, 2014, to buy the stake in Caspian Investment Resources Ltd., Lukoil said in a regulatory filing.  Caspian Investment holds stakes in four hydrocarbon projects in Kazakhstan, Lukoil said. Sinopec didn’t immediately reply to e-mailed requests for comment sent by Bloomberg to its investor-relations department and public-relations staff.

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Giant oil field in Kazakhstan moving forward

23 Dec 2014   Kazakhstan

Italian energy company Eni committed to moving forward with developments at Kashagan oil field, one of the largest in the world. (Photo: North Caspian Operating Co.) ASTANA, Kazakhstan, Dec. 22 (UPI) — Italian energy company Eni said Monday it was committed to getting the Kashagan oil project in Kazakhstan, one of the world’s largest, up and running. Eni Chief Executive Officer Claudio Descalzi met in Astana with Kazakh leaders to discuss developments at the offshore Kashagan oil field . Kashagan is among the largest oil fields in the world, with an estimated 16 billion barrels of oil reserves. Production was halted in October 2013, less than a month after it started, when a pipeline associated with the field cracked open. Last week, members of the production consortium, which includes Eni, met with government officials and the North Caspian Operating Co. to review the project. Terms of an agreement charting […]

One Of The World’s Biggest Oil Projects Is A Total Fiasco

14 Oct 2014   Kazakhstan

WHEN it was discovered in 2000, the Kashagan oilfield in Kazakhstan’s waters in the northern Caspian Sea was the world’s biggest oil find in three decades. By now it was supposed to be pumping out 1.2m barrels a day (mbd), enough to meet Spain’s entire consumption. But the project, whose name sounds unfortunately like “cash all gone”, went spectacularly awry. A year ago, when the first trickle of crude briefly flowed, it was already eight years behind schedule. Having cost $43 billion, it was $30 billion over budget. And production lasted only a few weeks before leaks of poisonous gas forced its suspension. Earlier this month a government minister admitted it would not restart until at least 2016. Undeterred by the […]

Leaking pipelines to add up to $4bn in costs to Kashagan oil project

9 Oct 2014   Kazakhstan

The cost of Kashagan, already the world’s most expensive oil project , is set to rise by nearly $4bn as the companies developing it are forced to replace 200km of leaking pipelines. The rise marks another setback for a venture that was supposed to symbolise Kazakhstan’s emergence as a leading oil producer, but it has been dogged by technical challenges, delays and cost over-runs. More On this topic IN Oil & Gas The consortium – which includes , , , and CNPC – marked first production at the Kazakhstan field in September last year after spending $50bn on its development, but production was shut weeks later when sulphur-containing gas was discovered leaking from pipelines between […]

Gazprom looks to future in Kazakhstan

25 Jul 2014   Kazakhstan

Russian natural gas company Gazprom said it was considering extending its working relationship with its counterparts in Kazakhstan through the 2030s. Deputy Gazprom Chairman Alexander Medvedev met in Astana with Kazakh Oil Minister Uzakbai Karabalin to review the Russian company’s future in the former Soviet republic. “The parties discussed further cooperation in the gas sector and, in particular, the extension of the long-term agreement till 2038 — on purchase and sale of gas produced from the Karachaganak gas and condensate field,” Gazprom said in a statement Wednesday. “A focus was also placed on the prospects for the joint development of the Imashevskoye gas and condensate field.” Kazakhstan is a net importer of natural gas. Much of its domestic gas is used to enhance production from its vast oil fields. It has 85 trillion cubic feet of proven natural gas reserves and Karachaganak and Imashevskoye combine to represent 53 percent […]

Production at Kazakhstan’s Kashagan Oil Field Halted Until 2016

11 Jun 2014   Kazakhstan

The full moon rises in the background over an oil rig at the Kashagan offshore oil field in the Caspian Sea in western Kazakhstan. Reuters Kazakhstan’s giant Kashagan oil field, one of the world’s largest industrial projects, won’t produce any oil until at least 2016 while workers battle against the hostile Caspian Sea to complete massive repairs, according to people familiar with the matter. The project’s partners, which include Eni SpA, Total SA, Royal Dutch Shell PLC and Exxon Mobil Corp. , have concluded they must entirely replace two 55-mile pipelines before they can restart production, the people said. Replacing the two pipelines connecting an offshore artificial island to onshore facilities is estimated to cost “a few billion dollars,” they said. The latest delay is a blow to the Kazakh government, which had based its economic forecasts on revenue from the Caspian Sea oil field, where output was expected […]

Kazakh Kashagan oil field to change management model, keep current operator

10 Jun 2014   Kazakhstan

 Kazakhstan’s troubled giant offshore Kashagan field is set to see a revamp of the management model in the next several months, but will not change conditions of the field’s production sharing agreement (PSA) and its shareholding structure, the Kashagan operator NCOC said in a statement Monday. Earlier this month, Kazakhstan’s oil and gas minister Uzakbay Karabalin told local media that the ministry was dissatisfied with Kashagan’s rising costs and slow decision-making processes and expected the project’s management system to become more efficient after the planned revamp. “No changes to the PSA and/or the NCSPSA [the North Caspian Sea Production Sharing Agreement] ownership structure are envisioned as a result of the planned transition,” NCOC said in a statement. An NCOC spokesman denied last week’s report by the Nefte Compass publication that US major ExxonMobil is to take over as Kashagan’s effective operator from Italy’s Eni. […]

Report: Exxon May Take Over as Kashagan Operator

7 Jun 2014   Kazakhstan

U.S. oil major Exxon Mobil is in line to take over as operator of the giant Kashagan field in an attempt to fix the beleaguered $50 billion project offshore Kazakhstan, industry publication Nefte Compass reported on Friday. Discussions are continuing but Exxon could be appointed as soon as at the end of June, the newsletter quoted a senior Kazakh official as saying. Exxon was not immediately available for comments. Italy’s Eni was given the job of operating the project in 2001. It later lost its role as the sole lead operator following major delays and cost overruns. Production finally started last September but was halted in early October after the discovery of gas leaks in the pipeline network. Oil output may now not restart until early 2016, Kazakh Oil and Gas Minister Uzakbai Karabalin said in May, urging foreign partners to start replacing leaky […]

Hungary’s MOL finds oil, gas onshore Kazakhstan

28 May 2014   Kazakhstan

Hungarian energy company MOL said it discovered oil and natural gas while drilling into the Rozhkovskoye field onshore Kazakhstan. MOL said it posted a test flow rate of 1.9 million barrels of oil equivalent and 6 million cubic feet of natural gas per day from the field’s Federovsky block. MOL has a 27.5 percent stake in a consortium controlled by the country’s state-owned KazMunaiGas. The Hungarian company said qualitative analysis was underway to get a better understanding of the full reserve potential in the Federovsky block. The company offered no reserve estimate for the entire Rozhkovskoye field in its Monday announcement. Kazakhstan has the second largest oil reserves and is the second largest oil producer among former Soviet republics. Onshore fields like Rozhkovskoye account for roughly half of the country’s proven oil reserves, the U.S. Energy Information Administration reports . © 2014 United Press […]

Further blow for $50bn Kashagan oil project

30 Apr 2014   Kazakhstan

The $50bn Kashagan oil project in Kazakhstan is likely to be delayed by two more years while 200km of pipeline is replaced, in a further blow for the companies developing the largest oilfield outside the Middle East. Erbolat Dossayev, Kazakhstan’s minister for economy and budget planning, told the FT that he expected production to start at the end of next year at the earliest – but that it could be delayed until 2016. It is the first public admission by the government that the project will not only fail to produce oil this year but may not resume production until 2016. “It will be two years,” added one industry official. It is a blow for the consortium of companies – including ExxonMobil , Royal Dutch Shell , Total , and CNPC – which have invested some $50bn in the project so far in the hope that it would one […]

Giant Kashagan oilfield could be out of production for two years.

30 Apr 2014   Kazakhstan

“It has been reported by overnight that the super-giant  Kashagan oilfield in the northern Caspian sea “will be out of production for at least two years”. The shutdown has been necessitated by leaks of toxic gas from a pipeline, with Quartz reporting that two new pipelines will now be required to replace the two existing oil and gas pipelines.” “As reported in the FT last month , the Kashagan field had already been beset by problems over many years, with production  only beginning on 11 September last year, nearly a decade behind schedule. So far it has only produced at a rate of about 75,000 barrels a day for only one month, as it was shut in again in October shortly after beginning to produce when the problem of toxic-gas leaks first became apparent. The FT’s report had already […]

Sinopec to Pay $1.2 Billion for Lukoil’s Stake in Kazak Assets

15 Apr 2014   Kazakhstan

China Petroleum & Chemical Corp. (386) , Asia’s biggest refiner known as Sinopec, agreed to pay about $1.2 billion to buy a 50 percent stake in energy assets in Kazakhstan from Russia’s OAO Lukoil. The deal is expected to be completed before the end of the year, Lukoil said in a statement. Lukoil’s Caspian Investment Resources Ltd. owns, through a number of joint ventures, various stakes in four hydrocarbon-production projects in Kazakhstan. Lukoil’s share in commercial hydrocarbon production as part of the projects was 10.2 million barrels of oil equivalent in 2013, it said. To contact the reporter on this story: Aibing Guo in Hong Kong at aguo10@bloomberg.net To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net Madelene Pearson

Kashagan – Back to the drawing board?

15 Apr 2014   Kazakhstan

It should have turned Kazakhstan into a global oil and geopolitical champion. Instead, it turned out to be a cul-de-sac, swallowing over $50 billion since its discovery almost two decades ago. Kashagan, a mammoth-sized offshore oil field with recoverable reserves of some 13 billion barrels that stretches over more than 3000 square kilometers, was recently shut down indefinitely due to technical problems. With Kazakh ambitions scuttled and the reputation of the project-managing consortium in tatters, will it go down in history as the Titanic of oil fields? From euphoria to despair, Kashagan has been through it all. Major cost overruns, intense squabbles between major stakeholders, and insurmountable technical problems  prevented  the project from seeing daylight in 2005, as contractually required. Instead, it only began pumping the first barrels in September last year, but this lasted just a few days before the appearance of […]

Total Says Kashagan Oil Field Won’t Yield Much Output This Year

12 Apr 2014   Kazakhstan

An aerial view shows the artificial islands at the Kashagan offshore oil field in the Caspian sea in western Kazakhstan in this October 16, 2013 file photograph. PARIS— SA said Friday it doesn’t expect the to yield much output this year but said it was on the cusp of approving a $4 billion . The resumption of the Kashagan project has been beset with problems even since a tricky-to-fix gas leak forced the French company and its partners to stop production in October. “If there were to be any production by the end of the year, it wouldn’t be much,” Total’s president for exploration and production, Arnaud Breuillac, told reporters on the sidelines of an oil conference in Paris. He said the companies are waiting for the results of analyses and ultrasound probes on the leaking pipeline to identify the problem and find ways to fix it. Resuming output […]

OPEC gives poor marks for Kazakhstan’s Kashagan field

11 Apr 2014   Kazakhstan

While oil supply from Kazakhstan has increased, its giant Kashagan oil field has “sucked in” major capital with little to show for it, OPEC said Thursday. The Organization of Petroleum Exporting Countries said in its monthly market report oil supply from Kazakhstan increased by 60,000 barrels per day year-on-year to average 1.64 million bpd. Kazakhstan hosts Kashagan, one of the largest oil fields in the world, with an estimated 16 billion barrels of oil reserves. Production was halted in October, less than a month after it started, when a pipeline associated with the field cracked open. OPEC said final results from pipeline inspections aren’t due until second quarter 2014, though the project has already consumed substantial investments. “The giant Kashagan project has sucked in almost $50 billion without yielding a barrel of oil,” OPEC said in its market report. The North Caspian Operation Co. […]

Kashagan oil field hits restart delays

8 Apr 2014   Kazakhstan

It may cost as much as 15 times more to rebuild the pipelines needed to restart operations at the giant Kashagan field in the Caspian Sea, a metallurgist said. Kashagan is one of the largest oil fields in the world, with an estimated 16 billion barrels of oil reserves. Production was halted in October, less than a month after it started, when a pipeline associated with the field cracked open. A source close to the project told online energy news website Quartz corrosive hydrogen sulfide found within the natural gas associated with the field causes the field’s pipelines to crack open almost as soon the hydrogen sulfide is exposed to moisture. Barry Hindin, a corrosion engineer at Battelle Memorial Institute, told the news site a nickel-based steel alloy that would resist hydrogen sulfide may cost the consortium operating Kashagan as much as 15 times more than conventional pipelines. In […]

Kashagan Oil Field Seen as Unlikely to Restart This Summer

5 Apr 2014   Kazakhstan

Production at the giant Kashagan oil field in Kazakhstan is unlikely to restart this summer as the companies involved in the consortium running the project are still awaiting a report on a gas leak that closed the field last October, people familiar with the project said Wednesday. Resuming output is important so the companies, which include Exxon Mobil Corp. , Royal Dutch Shell PLC, France’s SA and Italy’s SpA, can start generating revenue to recoup some of the $50 billion they have already invested in Kashagan over the last 17 years. It is also important for the Kazakh government, which had based its economic forecasts on revenue from Kashagan, where output was expected to ramp up to 370,000 barrels a day from 180,000 barrels a day initially. “There’s no date for restart, but it certainly won’t be this summer,” said one person familiar with the project. In February, Claudio […]