• 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 27 mins Which producers will shut in first?
  • 1 hour The Most Annoying Person You Have Encountered During Lockdown
  • 1 hour Its going to be an oil bloodbath
  • 15 hours We are witnesses to the end of the petroleum age
  • 2 hours Saudi Aramco struggling to raise money for this year's dividend of $75 billion. Now trying to sell their pipelines for $10 billion.
  • 20 hours Breaking News - Strategic Strikes on Chinese Troll Farms
  • 4 hours Wastewater Infrastructure Needs
  • 18 hours A New Solar-Panel Plant Could Have Capacity to Meet Half of Global Demand
  • 19 hours >>The falling of the Persian Gulf oil empires is near <<
  • 21 hours Natural gas price to spike when USA is out of the market
  • 23 hours As Saudi Arabia Boosts Oil Output, Some Tankers Have Nowhere to Go
Why Are Tesla Cars So Popular?

Why Are Tesla Cars So Popular?

From their sleek futuristic design…

How COVID-19 Could Spark The Next Recession

How COVID-19 Could Spark The Next Recession

The COVID-19 crisis is wreaking…

Supermajors Are Abandoning This Oil Hotspot

Oil Hotspot

Oil majors are quitting two projects in the Caspian Sea in Kazakhstan because of high costs and low profitability, a unit of Kazakhstan’s state oil and gas firm KazMunayGas said on Monday.

Shell has decided to pull out of the Khazar field, and the North Caspian Operating Company (NCOC) consortium—of which Shell is a part—is quitting the Kalamkas project, according to Kazakhstan’s energy ministry.

Shell has already invested US$900 million in the Khazar project, but has faced challenging economics amid high investments.  

“Our partners’ decision is based on the low profitability of these projects against the background of high capital expenditures,” Reuters quoted the KazMunayGas unit as saying on Monday.

The shareholders in the North Caspian Operating Company (NCOC) are Kazakhstan’s state oil and gas firm KazMunayGas, France’s Total, Italy’s Eni, Royal Dutch Shell, ExxonMobil, China National Petroleum Corporation (CNPC), and Japan’s Inpex.

Kazakhstan had hoped that the consortium could be working with Shell on the development of the Khazar field, which is close to the giant and already producing oil field Kashagan operated by the NCOC consortium.

Related: Buffett’s Big Bet On Energy

But in view of the high costs—which had also plagued the development of the Kashagan field—Shell is now reconsidering its participation in the Khazar field, as oil majors continue to look for low breakeven projects for profits and returns on investment.

At Kashagan, crude oil production started in 2016 and is currently around 400,000 bpd. This makes the Kazakh field one of the largest offshore oil fields in the world.

Kashagan has reserves of 13 billion barrels of crude and in-place resources of as much as 38 billion barrels. But 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 on the initial US$20 billion to US$50 billion.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage




Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News