Azernews.Az

By Aynur Jafarova

Senior Scientific Associate of the Economics Institute under Kazakh Education and Science Ministry, Oleg Yegorov, said that increase of oil production in Kazakhstan completely depends on the start of the Kashagan production as it is currently the only oil field capable of significantly boosting oil production in the country.

According to the expert, the exact date of the launch of the field is unknown.

Oil production in the Kashagan field was scheduled to be launched in March. However, has been delayed four times and there is no assurance that Kashagan will be launched in summer or fall, he said.

"Earlier, it was expected to start oil production at Kashagan from 500,000 tons and then raise this level to 40-60 million. All former forecasts were based on sharp and quick production increase at this field. But this forecasts did not come true," Yegorov said.

Kashagan is one of the largest fields discovered in the past 40 years. According to the analysts, it has the potential to unite the top five largest oil companies in the world. Kazakh geologists estimate geological oil reserves at 4.8 billion tons.

Recoverable oil reserves of Kashagan are estimated at 11 billion barrels, whereas total geological raw material reserves stand at 35 billion barrels. It is believed to be the largest oil field in the world after Prudo Bay in Alaska.

The commencement of commercial production at Kashagan is expected by mid-2013. The first phase of the project envisions the volume of production at around 370,000 barrels of oil per day with a possible increase to 450,000 barrels. The second phase envisages increasing production to 375,000 barrels per day within at least three years.

The expert doubts Kazakhstan will be able to intensify production dramatically at this field in a short period due to its difficult structure and offshore location.

According to Yegorov, Kazakhstan is not increasing, but rather reducing its oil production at the moment.

"In 2012, we produced less oil compared to the 2011 results," he said.

According to the expert, lower oil production will restrict Kazakhstan's oil export capacity, and Kazakhstan's budget and national fund will lose a significant part of the income as a result. Moreover, low oil production will reduce oil processing within the country and may lead to fuel shortage in Kazakhstan.

"According to the existing agreement, Russia will supply duty free up to 7 million tons of oil to the Pavlodar refinery per year up to 2014. Meanwhile the Atyrau and Shymkent refineries may face crude oil shortage. Although, they do not work at designed capacity even now," he said.

Meanwhile, the Kazakh Statistics Agency reported that Kazakhstan's production of oil and gas condensate increased by 2.5 percent to 20.6 million tons in January-March 2013 compared to the same period last year.

Production of natural gas increased by 5.2 percent and amounted to 10.9 billion cubic meters, while gasoline production decreased by 18.2 percent to 0.6 million tons and power generation decreased by 2.2 percent - to 25.3 billion kilowatt-hours.

According to the agency, production of coal and ore of non-ferrous metals also increased compared to the same period of 2012.

Earlier, Kazakh Oil and Gas Ministry lowered forecast for oil and gas production and oil refining in 2013-2015.