Thirteen years in the making and $50 billion later, the supergiant Kashagan oil field in Kazakhstan is finally online after many delays, but its short-term impact on the global oil market will be negligible and return on investment way down the road.
That said, we’re potentially set to see the first commercial output by the end of this month, and eventually we’re looking at a 1.5-million-barrel-a-day production capacity.
On 11 September, initial oil production began at Kashagan after years of delays. But only days into initial production, operations were halted on 25 September when a leak was detected on a pipeline running to a processing plant that receives oil from the field.
Anxieties were running high as this could have meant another delay to the late October goal of achieving the first commercial output. On 6 October, production resumed, though and by 8 October had reached 61,000 bpd.
This is but one in a long line of headaches that have plagued the supergiant development, but eventually the impact will be supergiant—just like the field itself.
Kashagan is the largest oil field outside the Middle East, and it has also proved to be the most expensive in the world to develop—so far. By further way of comparison, Kashagan is roughly equivalent to Brazil’s total proved onshore and offshore reserves, plus Kazakhstan also has the onshore Tengiz oil field.
The Kashagan field was discovered…