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Oil production up at giant Kashagan field, KazMunaiGas says

10 October 2013 19:13 (UTC+04:00)
Oil production up at giant Kashagan field, KazMunaiGas says

By Aynur Jafarova

Oil production at the giant Kashagan field in Kazakhstan's sector of the Caspian Sea has been increased to 60,000 barrels per day, board chairman of JSC NC KazMunaiGas Sauat Mynbayev said on October 8 at the opening of the KAZENERGY Eurasian Forum in Astana.

"Every year significant investments enter the oil and gas industries of our country and large-scale projects in the field of production are being implemented. Kashagan is one such project. The first oil has been produced and today it (production) amounts to about 60,000 barrels per day. Kazakhstan and its partners have been aiming for this for over 10 years," Mynbayev said.

Kashagan is one of the largest fields discovered in the past 40 years. Recoverable oil reserves of Kashagan are estimated at 11 billion barrels, whereas total geological crude reserves stand at 35 billion barrels. Besides, natural gas reserves are estimated at over 1 trillion cubic meters. The first well in the Kashagan field was reopened and first oil volumes were produced on September 11.

Mynbayev went on to say that most of the world's oil and gas -- 60-65 percent -- accounts for Eurasia. Therefore, the continent largely determines the dynamics of the demand on a global scale. According to him, this is why the processes taking place in Eurasia will shape the long-term scenarios in the world energy industry.

"The International Energy Agency (IEA) expects growth in demand for crude oil, which stood at 87 million barrels per day in 2011, to reach almost 100 million barrels in 2035. According to our estimates, this demand could reach 100-120 million barrels much sooner," Mynbayev said.

A very limited number of countries will be able to actively increase the production of crude. Kazakhstan intends to strengthen its position prior to the forecasted increase of demand, Mynbayev said.

Mynbayev also said that Kazakhstan expects a year-on-year increase in oil and condensate production to 100 million tons by 2025.

All this will depend on the time of the third phase of Karachaganak field development, on the expansion of Tengiz field and probably the second phase of Kashagan.

The Tengiz oil field was discovered in 1979 and is one of the deepest and largest oil fields in the world. Reserves of the deposit are estimated at 750 million to 1.1 billion tons (6-9 billion barrels) of recoverable oil.

Karachaganak is one of the world's largest fields. Its oil reserves amount to 1.2 billion tons, while those of natural gas are 1.35 trillion cubic meters.

Touching on the launch of the third branch of the Kazakhstan-China gas pipeline, Mynbayev said that it is due to be commissioned in 2016.

"The Kazakhstan-China gas pipeline with a capacity of 30 billion cubic meters per year was commissioned in December last year. Currently, over 63 billion cubic meters of gas are being transported to China through the two branches of this main pipeline. The construction of the third branch has been initiated and a full launch is planned for 2016," Mynbayev said.

According to him, this will allow to additionally transport 25 billion cubic meters of gas, 5 billion cubic meters of which are intended for Kazakh consumers in the country's southern regions.

Speaking at a press conference held during the VIII KAZENERGY Eurasian Forum, Oil and Gas Minister Uzakbay Karabalin said that Kazakhstan's hydrocarbon reserves could double by the completion of the Eurasia project, which envisages the exploration of deep horizons of the Caspian Sea basin.

"We expect the possibility of doubling Kazakhstan's potential because the depth of this basin is nearly 20,000-25,000 meters and there is a huge volume of oil generating rocks," Karabalin said.

Experts estimate that the Caspian Sea has great prospects and potential in the generation of hydrocarbons, but limited exploration has been carried out to date and only the so-called pre-side zones of the basin have been studied, Karabalin said.

Kazakhstan's proven oil reserves stood at 30 billion barrels in early 2013, according to BP. OPEC predicts Kazakhstan's oil production at 1.69 million barrels per day (bpd) in 2014 while according to the EIA, this figure will stand at 1.65 million bpd in 2014.

Production of crude oil increased in Kazakhstan in January-August 2013 compared to the same period of 2012. Over this period, oil production, along with gas condensate, amounted to 54 million tons, or 3.1 percent more than the same period of last year.

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