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U.S. company may become Kashagan's new operator

9 June 2014 12:15 (UTC+04:00)
U.S. company may become Kashagan's new operator

By Aynur Jafarova

The U.S. ExxonMobil Company may become the new operator of development of Kazakhstan's giant Kashagan field in the Caspian Sea, Caspian oil industry sources told Nefte Compass on June 6.

"Discussions with the North Caspian Operating Co. (NCOC) are underway, but Exxon could be appointed as soon as the end of June," one senior Kazakh official said on the sidelines of this week's Caspian Oil and Gas Conference in Baku, Azerbaijan.

ExxonMobil have not yet commented on this issue.

With recoverable oil reserves estimated at 13 billion barrels, the 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 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.

The commercial production at the field is expected to be resumed in late 2015.

In May, Kazakh Oil and Gas Minister Uzakbai Karabalin said Kazakhstan is going to form a new operator to develop the country's giant Kashagan field in the Caspian Sea.

"NCOC, the operating company, is undergoing transformations, and, accordingly a new unified management system is being created. That's to say, a new operator will be formed for the Kashagan field. It will include the best specialists of all the contractors of the consortium," Karabalin said.

The formation of the new operator is planned to be completed by September with the aim of ensuring more effective work at the field.

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