Kashagan’s peak oil further delayed, Kazakh output for this year to exceed 80 million tonne
Kazakhstan’s main hope to join the ranks of leading global oil exporters, the offshore field of Kashagan together with three adjacent blocks, has suffered one more setback as so-called peak oil (the highest output level during the period preceding decline) can only be expected by the end of the current decade, New Europe wrote in a report – quoting the Kazakh state oil and gas minister Sauat Mynbayev and the chief-executive of Kazakhstan’s state oil and gas company Kazmunaygas Kairgeldy Kabyldin. “A group of six companies – participants of the Northern Caspian project - informed the Minister of Oil and Gas at the end of July that the second phase of the Kashagan project was postponed until 2018-2019,” Kabyldin told a board meeting of the national fund Samruk-Kazyna attended by Kazak Prime Minister Karim Masimov,” the weekly wrote in its issue of August 30.
Reserves of the Kashagan project have been put at 5 billion barrels in cautious estimates, while others deem recoverable reserves at up to 9 billion barrels. The cost of the fields’ development, originally put at 25 billion US dollar in the late 1990s, have now soared to six-fold that amount due to “technical complications”. The first drilling took place using the Sunkar jack-up, leased from Azerbaijan and, looking back, unfit for shallow waters. A blow-out consequently occurred with thousands of tonnes of crude leaking into the maritime environment. More profound analyses of the area’s geological structure, based on interconnected salt domes which harbours the wells, revealed that numerous fault traps in the subterranean rock layers require carefully-planned directional drilling in order to avoid further accidents. Equipment and infrastructure for the purpose had to be specifically designed and built – hence the loss of time and the increase in expenses. Kazmunaygaz, which took a major stake in the consortium in 2008, has been ordered by the government to bring expenditures down to a “reasonable” level in New Europe’s words – even if it means that the production programme will slow down. “First commercial” oil output is still expected to start as of 2014 – at a rate of half a million barrels per day, according to New Europe.