Category:

Kazakhstan Sues Foreign Oil Majors Over Flailing Kashagan

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 […]

Posted On : Published By : Tom Whipple
Category:

Eni Sees Kashagan Output Recovering to Expected Level From 2015

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]

Posted On : Published By : Tom Whipple
Category:

More oil expected from Kazakhstan

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 […]

Posted On : Published By : Tom Whipple
Category:

Kashagan Operators Weigh Way to Restart Oil Output While Fixing Pipe

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 […]

Posted On : Published By : Tom Whipple
Category:

Kashagan Gas-Leak Probe Finds More Potential Problems

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. […]

Posted On : Published By : Tom Whipple
Category:

Tiny Cracks Scrutinized in Kashagan Pipeline Leak

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 […]

Posted On : Published By : Tom Whipple
Category:

Chevron tapped for TAPI pipeline

ISLAMABAD, Nov. 12 (UPI) — U.S. energy company Chevron may come on board to help build a multilateral gas pipeline eastward from Turkmenistan, official sources told the Express Tribune. The Pakistani newspaper reported Tuesday a possible role for Chevron in the Turkmenistan- Afghanistan -Pakistan-India pipeline is on the agenda of a bilateral meeting this week between U.S. and Pakistani officials in Washington. “During the energy group meeting, the issue relating to awarding [the] TAPI gas pipeline contract to Chevron will come under discussion,” sources told the newspaper on condition of anonymity. The same sources said participating countries, notably Pakistan, were called on to award pipeline construction contracts to Chevron. Iran and Pakistan are negotiating terms for the construction of a bilateral pipeline designated for Iranian gas. Pakistan says it needs to secure more sources of energy to help compensate for a domestic energy sector crippled by an aging infrastructure. […]

Posted On : Published By : Tom Whipple
Category:

Facing Shortages, Uzbekistan to Increase Turkmen Oil Imports

Drivers in Uzbekistan have long complained about gasoline shortages. With little explanation, it seems the secretive government is trying to address mounting domestic gasoline shortages and panic at local petrol stations. Tashkent intends to increase imports of oil from neighboring Turkmenistan, Moscow-based Fergana News reported on November 11, citing Uznefteprodukt, the state-run refining company.  It’s unclear how large the increase will be, however. Repeated calls to Uznefteprodukt went unanswered on November 12. The company’s website confirms the plans for imports, but does not name figures.  Oil output in Uzbekistan fell from 78,000 barrels per day (bpd) in 2010 to 68,000 bpd in 2012, according to the BP Statistical Review of World Energy for 2013, largely due to aging infrastructure and limited investments. Over the same period, consumption increased from 75,000 bpd to 82,000 bpd, BP said.  Neither Uzbekistan nor Turkmenistan disclose energy import or export figures. Uzbekistan also imports […]

Posted On : Published By : Tom Whipple
Category:

CNPC raises gas output from Turkmen fields to meet Chinese winter demand

Singapore (Platts)–12Nov2013/419 am EST/919 GMT China National Petroleum Corp has ramped up production at its gas fields in Turkmenistan in anticipation of higher winter demand in China, the company said Tuesday. Gas from the Amu Darya project’s 31 wells is now flowing at rate of 19.8 million cubic meters/d or nearly 700,000 Mcf/d, while sales volumes have risen 11.7% year on year to 18.1 million cu m/d, CNPC said. Gas production comes from two blocks in the Bagtyiarlyk contract area on the right bank of the Amu Darya River. CNPC signed a production sharing agreement for the acreage in 2007 and production started in 2010. CNPC said it has primarily carried out capacity expansion at Block A, where the gas processing capacity is now 6.5 billion cu m/year, while sales gas send-out capacity has reached a new high of 18 million cu m/d. A second phase development will see […]

Posted On : Published By : Tom Whipple
Category:

Kashagan Giant Oil Field Won’t Restart Output Before Next Year

Oil production at Kazakhstan’s huge Kashagan field, halted since mid-October because of a dangerous gas leak, won’t resume before next year, according to people familiar with the matter, casting a cloud over one of the world’s biggest energy projects. Equipment needed to inspect a leaking pipeline connecting the field in the Caspian Sea to an onshore processing unit won’t arrive on site before mid-November, the people said. The inspection will determine how much of the pipeline must be replaced, and once it is completed a preliminary report on how to conduct repair work won’t be submitted to Kashagan operators before late December, they said. NCOC, the consortium of oil companies operating the field, said it was too early to say when production—which exceeded 75,000 barrels a day at the time of the shutdown—might restart. “No prediction can be made,” a NCOC spokesman said. The stoppage at Kashagan after barely […]

Posted On : Published By : Tom Whipple