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Giant Kazakh Oil Field Set To Resume Production By End-2016

Kashagan D Island

The company overseeing the operations of the giant, highly expensive and complex Kashagan field in Kazakhstan expects to resume production by the end of this year, UPI reported on Wednesday, quoting Ainash Chengelbayeva, the media relations advisor at the North Caspian Operating Company.

“Production is expected to ramp up initially to 180,000 barrels per day and further to 370,000 bpd during 2017,” Chengelbayeva said in reply to emailed questions.

The Kashagan field in the Kazakh waters of the Caspian Sea had already been years behind schedule when it achieved first oil production in 2013. But operations were halted just a month later, when a leak in a pipeline forced the whole project to shut down. The company’s partners in the Kashagan project – Italy’s Eni, Kazakh state-held KazMunayGas, Royal Dutch Shell, Total SA, ExxonMobil, China National Petroleum Corporation, and Inpex – have been working to replace it ever since.

The pipeline replacement has been completed ahead of schedule and within budget, UPI quoted Chengelbayeva as saying.

Kashagan has been very difficult to develop due to geological challenges and corrosive hydrogen sulfide gas, but its huge investment tag, US$50 billion, has also been a challenge to its owners and the Kazakh government. The project may come online in October.

Commercial volumes are expected to be reached in November of this year, state-held company KazMunayGaz has recently said.

However, analysts beg to differ on company estimates that Kashagan would reach the 370,000-bpd production target next year. Wood Mackenzie expects that the field will still cause problems for the partners. The consultancy only sees the field producing 154,000 bpd day in 2017. Actually, Wood Mackenzie doesn’t expect Kashagan to reach that output target until 2026 at least, a stark difference from the oil companies’ estimates.

By Tsvetana Paraskova for Oilprice.com

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