Kazakhstan’s North Caspian Operating Company, which manages the giant Kashagan oil field, is planning further production increases after recent upgrade and maintenance work, and aims to present a new project for two nearby fields in the current quarter, it told S&P Global Platts. In an email, the management of the seven-member consortium also underlined the challenge of dealing with fluctuating Caspian sea levels, which have fallen by a meter in the last decade in the shallow Kazakh sector of the northern Caspian.
Discovered in 2000, Kashagan was one of the largest oil finds of the last half century, with an estimated 9 billion-13 billion barrels of recoverable oil, but was plagued by difficulties during its initial development, which cost $55 billion. Oil production volumes have reached 370,000 b/d following the first major shutdown since production began in 2016, according to NCOC, which is headed by former Shell executive Richard Howe.
The 35-day shutdown, completed in May, included projects to improve safety and efficiency, among them a processing plant re-boiler upgrade, and a revamp of the offshore gas injection system. The latter “allowed us to substantially increase gas injection and oil production,” NCOC said.
“Preliminary engineering” is now underway that could lift Kashagan production above 450,000 b/d under the current development phase, although this would require investor and government approval, it said. In parallel, NCOC said it had started planning a second phase to further boost production, something it has appeared to shy away from until first-phase production was stabilized. “Work is now underway to plan the second stage of development. NCOC plans to announce later the concept of this development of the Kashagan field [which] will significantly enhance production versus the current level,” it said.
Additionally, the consortium, together with another venture that holds the license to the nearby Khazar field, aims to submit a development plan for both the Khazar and Kalamkas Sea fields in the current quarter, NCOC said. Khazar is operated by a joint venture between Shell and state-owned KazMunaiGaz and Oman Oil Company. A joint development with NCOC would “maximize synergies and contribute to the economic viability” of both fields, NCOC said.