Category: Kazakhstan

It may cost as much as 15 times more to rebuild the pipelines needed to restart operations at the giant Kashagan field in the Caspian Sea, a metallurgist said. Kashagan is one of the largest oil fields in the world, with an estimated 16 billion barrels of oil reserves. Production was halted in October, less than a month after it started, when a pipeline associated with the field cracked open. A source close to the project told online energy news website Quartz corrosive hydrogen sulfide found within the natural gas associated with the field causes the field’s pipelines to crack open almost as soon the hydrogen sulfide is exposed to moisture. Barry Hindin, a corrosion engineer at Battelle Memorial Institute, told the news site a nickel-based steel alloy that would resist hydrogen sulfide may cost the consortium operating Kashagan as much as 15 times more than conventional pipelines. In […]

Click here to view full article at www.upi.com

Production at the giant Kashagan oil field in Kazakhstan is unlikely to restart this summer as the companies involved in the consortium running the project are still awaiting a report on a gas leak that closed the field last October, people familiar with the project said Wednesday. Resuming output is important so the companies, which include Exxon Mobil Corp. , Royal Dutch Shell PLC, France’s SA and Italy’s SpA, can start generating revenue to recoup some of the $50 billion they have already invested in Kashagan over the last 17 years. It is also important for the Kazakh government, which had based its economic forecasts on revenue from Kashagan, where output was expected to ramp up to 370,000 barrels a day from 180,000 barrels a day initially. "There’s no date for restart, but it certainly won’t be this summer," said one person familiar with the project. In February, Claudio […]

Click here to view full article at online.wsj.com

Kazakh workers were recuperating from the frigid temperatures of the Caspian Sea over cups of tea when their Italian supervisor interrupted their break, demanding they return to work. The workers restrained the supervisor—a manager working for SpA, a company building a giant oil development here—and put a plastic bag over his head. He fled, packed his bags and left Kazakhstan. The spat was a brief episode yet emblematic of the endless challenges that have hobbled a project once hailed as the dawn of a new era in cooperation between oil-rich countries and Western companies. Asked about the 2011 incident, which was described by Western oil-company managers, a senior Eni executive said that he wasn’t familiar with it but that friction between workers and management is a periodic occurrence. Tantalizing rewards were envisioned for both sides from the oil project here, known as Kashagan, at the outset two decades […]

Click here to view full article at online.wsj.com

Kazakhstan is suing foreign oil majors developing its huge Kashagan oilfield in the Caspian Sea, a tactic similar to those that secured the government large stakes in two of the three multinational energy projects on its territory. Repeated delays at the 13-year-old project, targeted to produce as much oil as OPEC member Angola from a reserve almost as big as Brazil’s, have infuriated the Kazakh government. The consortium, led by Exxon, Royal Dutch Shell , Total and Eni as well as Kazakh state oil firm KazMunaiGas, may face Kazakhstan seizing a bigger stake in Kashagan or refusing to reimburse a big chunk of the $50 billion spent on bringing it onstream. The latter option is written into the Kashagan […]

Click here to view full article at www.rigzone.com

Eni SpA, Italy’s biggest energy company by market value, Thursday said it expected the giant Kashagan field in Kazakhstan to recover production to the original expected level from 2015. The field’s contribution to Eni’s production for 2014 has been assumed to be marginal, the company said in a statement accompanying fourth-quarter results. Recovery activities are ongoing at Kashagan, it added. Output at Kashagan, which is one of the biggest oil finds in decades, was suspended in October at about 65,000 barrels of oil a day, only a few weeks after starting, after a series of natural gas leaks. No timing of its recommencement has been given. The consortium developing Kashagan, which includes Eni, Total SA, Royal Dutch Shell PLC and Exxon Mobil Corp., had said it planned to increase production to 370,000 barrels of oil a day in 2015. Write to Liam Moloney at [email protected]

Click here to view full article at online.wsj.com

The Kazakh Ministry of Energy outlined a strategic 2014 agenda to the nation’s president, a plan that calls for a slight increase in oil production. Kazakh Oil and Gas Minister Uzakbai Karabalin met President Nursultan Nazarbayev to discuss plans for the current year, the president’s official website said Monday. The EIA, the U.S. Energy Department’s statistical arm, said Kazakhstan, a former Soviet republic, is estimated to hold 30 billion barrels of proven oil reserves. Its Kashagan field, the fifth largest in the world in terms of volume, holds an estimated 13 billion barrels of oil. The Kazakh government said it expects to see a modest increase in oil production in 2014 to 608 million barrels of oil, compared to the 600 million barrels produced last year, Russian state news agency RIA Novosti reported. The press agency didn’t say which reserve areas would be […]

Click here to view full article at www.upi.com

Operators of Kazakhstan’s huge Kashagan oil field are considering a temporary solution to resume output, halted indefinitely since mid-October after a series of dangerous gas leaks, people with direct knowledge of the plan said. Before the stoppage, sour and toxic gas coming off the offshore field in the Caspian Sea was separated from crude oil, and sent to an onshore processing plant via a 56-mile pipeline. But the pipe is plagued by leaks and the North Caspian Operating Co. running the $50 billion project has yet to determine how to fix it. Releasing the potentially lethal gas into the air or flaring it isn’t an option because of safety and environmental regulations. Exxon Mobil Corp. , Royal Dutch Shell PLC, and other members of the NCOC consortium are now looking into a makeshift solution that would involve re-injecting the gas into the ground, the people familiar with the matter […]

Click here to view full article at online.wsj.com

An investigation into a gas leak that closed Kazakhstan’s vast Kashagan oil field less than a month after it first started pumping crude found has more potentially problematic locations along an onshore gas pipeline, raising fears of further delays to the $40 billion project. A prolonged halt at Kashagan, which has been plagued by years of delays and cost overruns, could be a drag on the finances of the consortium behind the project, which includes Exxon Mobil Corp. […]

Click here to view full article at online.wsj.com

Operators of the giant Kashagan oil field in Kazakhstan are homing in on microscopic cracks in a steel pipeline as they race to understand the cause of dangerous gas leaks that have forced them to halt output indefinitely and could result in hefty repair costs. Members of the NCOC consortium running Kashagan fear the stoppage could extend well into next year if a technical investigation, launched in October after leaks were detected for the second time in three weeks, concludes that a poisonous mix of hydrogen and sulfur contained in the crude oil has done extensive damage to the pipeline system in the $40 billion project, people familiar with the matter said. A prolonged stoppage at Kashagan, where oil had begun flowing on Sept. 11 after many years of delays and cost overruns, could be a drag on the finances of consortium members, including Italy’s Eni ENI.MI -0.06% ENI […]

Click here to view full article at online.wsj.com