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Mexico’s Oil Future Is In Jeopardy

Mexico’s Oil Future Is In Jeopardy

Mexico’s energy outlook is looking…

Mammoth Oil Field Hit Hard By Unplanned Production Cuts

Offshore

Oil production at one of the world’s largest offshore oil fields, Kashagan in Kazakhstan, has dropped by 80,000 barrels per day since early October because of unplanned maintenance, Kazakhstan’s energy ministry told Reuters on Wednesday.

Between October 6 and October 16, production at Kashagan was down to 294,000 bpd on average, from 365,000 bpd at the beginning of this month, industry sources told Reuters. The reason for the unplanned maintenance was a loss of pressure at one compressor, which necessitated works to be carried out. The energy ministry confirmed that production at Kashagan had lost up to 80,000 bpd over the past ten days.

The unplanned maintenance works were completed on Tuesday, and work is ongoing at the oil field to restore production up to 395,000 bpd - 400,000 bpd, the ministry told Reuters.

Oil production at Kashagan started in 2016, and is around 400,000 bpd, making the Kazakh field one of the largest offshore oil fields in the world in terms of production.

The North Caspian Sea Production Sharing Agreement (NCSPSA) holds the North Caspian license, which encompasses the Kashagan oil field. The shareholders in the North Caspian Operating Company (NCOC) are Kazakhstan’s state oil and gas firm KazMunayGas, Total, Eni, Royal Dutch Shell, ExxonMobil, China National Petroleum Corporation (CNPC), and Inpex.

Related: What Trump’s “Baffling Decision” Means For The Saudi-Iran Crisis

The government of Kazakhstan and the group of international oil companies that develop the Kashagan oil and gas field are weighing the possibility of building a gas processing plant near the field estimated to cost US$1 billion, the Deputy Energy Minister of Kazakhstan, Murat Zhurebekov, told Reuters last month.

Kashagan has reserves of 13 billion barrels of crude and in-place resources of as much as 38 billion barrels. Its development has been challenging, mainly because of climatic and geological peculiarities, and because of cost overruns that saw the final budget more than double from the initial US$20 billion to US$50 billion. There have been plans to bring the field’s production rate to half a million barrels daily.

By Tsvetana Paraskova for Oilprice.com

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