Oil production at Kashagan field not to be resumed until end of 2015

By Aynur Jafarova

Oil production at Kazakhstan's giant Kashagan field will not be resumed until the end of 2015, Oil and Gas Minister Uzakbai Karabalin told journalists on July 1.

He noted that there are still a number of obstacles to resume oil production at the field in the Kazakh sector of the Caspian Sea.

"First of all, the development process of the field is hampered by ice conditions," Karabalin said. "Ice is movable in our [Kazakhstan] sector of the Caspian Sea, and it moves 500 kilometers and creates hummocks... Also, the situation in Kashagan is complicated by the high concentration of hydrogen sulfide and high reservoir pressure."

The minister recalled that when Kashagan field was launched in last autumn, it was found out that all the wells were operating normally, the presence of oil was approved, and all the equipment installed both on the mainland and on the island were working properly.

"Kashagan is located in a conservation area, where there is 75 percent of sturgeon. There are also lots of nests of water birds. And, according to the law, the oil companies of international consortium, conducting the development of the field can work only when the chicks are displayed. That is, we can work after hatchling of chicks and before the sea is covered with ice," he added.

Karabalin went on to say that another postponement of oil production at the Kashagan field will seriously affect the country's economy.

With recoverable oil reserves estimated at 13 billion barrels, Kashagan field is believed to be the largest oil field in the world after Prudo Bay in Alaska. Its natural gas reserves are also estimated at over 1 trillion cubic meters.

The Kashagan shareholders are Eni, ExxonMobil, Royal Dutch Shell, France's Total and Kazakh state oil company KazMunaiGas (KMG), each with 16.8 percent, and Japan's Inpex and China National Petroleum Corp. (CNPC) as junior partners.

Oil production in the Kashagan field started on September 11, 2013. However, operations had to be stopped on September 24 due to a gas leak in the onshore section of the gas pipeline running from Island D to the Bolashak onshore processing facility.

The Department of Emergency Situations was immediately briefed on the regulations. Production was resumed, but stopped again on October 9 after the detection of another gas leak.