Source: Oil production at Kashagan may be stopped for ice season in Caspian Sea

Source: Oil production at Kashagan may be stopped for ice season in Caspian Sea

Kazakhstan, Astana, Sept. 12 /Trend D.Mukhtarov/

Oil production at the Kashagan field may be stopped with the start of the ice season in the Caspian Sea, a reliable source in oil and gas circles said in an interview with Trend.

"Most likely oil production at Kashagan will be suspended with the start of the ice season in the Caspian Sea. Yesterday the first barrel of Kashagan oil was extracted from the re-opened first well, although originally it was planned to get oil from five wells," the source said.

On September 11, 2013 it was reported that the North Caspian Operating Company B.V. (NCOC) announced on behalf of the Consortium within the framework of the Caspian Sea Production Sharing Agreement, that the initial volumes of oil had been produced at Kashagan field.

Earlier, the head of KazMunaiGas (KMG) Sauat Mynbayev said that 'it will be the first trial oil'.

"But it has to reach a certain level when it will be possible to announce the start of commercial production. In a month that period is needed from the first oil till the start of commercial production, may be less, say about three weeks," KMG head said.

The informed source explained that 'such a term of three or four weeks is needed for the injection wells to start working in accordance with the technology'.

"But if there are problems with the equipment, then with the coming winter, this trial launch will be postponed until Spring 2014, approximately in April-May," the interlocutor said.

The interlocutor noted that in October 2013, there comes a term when the state does not reimburse the costs of the international consortium which carries out the development of the Kashagan field.

"So, the contractor tried to launch the project by October of this year," the source underscored.

According to him, if there is no problem with gas leaking, the launched field will work for 180 days, that is six months and then the work will be suspended.

"After 180 days of production the project will stand for large scale alteration on two projects worth $10 billion each. The matter rests in that the equipment installed in the initial stages of construction has already become obsolete," the source added.

According to him, the unified company Nomad will be engaged in this work. The company will include Italian Agip KCO and NC Production Operations Company (50 per cent Shell and 50 per cent KazMunaiGas). The head of Nomad will be the current managing director of Agip KCO Umberto Carrara. Managing director of the NC Production Operations Company, Arjan Van Dijk, will hold the position of Nomad's manager for production.

It was previously reported that a serious accident resulting in the evacuation of staff occurred at Bolashak Integrated Oil and Gas Plant in Atyrau on August 26. Sensors detected leakage of liquefied gas under high pressure.

Сrimping of equipment and piping is currently carried out at the Bolashak and marine complexes where processed hydrogen sulphide gas from the gas distribution system Makat is used. If there was Kahagan oil saturated with hydrogen in the factory lines at the time of the accident, the consequences would have been much more serious.

Deputy Head of the Department of Ecology of the Atyrau region Ruslan Tukenov confirmed that the incident took place. Information was received from the Department of the Prosecutor's Office and the National Security Committee of Makat district. An inspection was launched.

The Kashagan field is the largest oil field in the northern part of the Caspian Sea with geological reserves amounting to nearly 35 billion barrels.

The next development projects will lead to a significant increase of production and bring Kashagan to the level of the most important participants of the global market of energy resources.

It was earlier reported that the start of industry production at the field was repeatedly postponed, the last time it was rescheduled for October 2013.

Kashagan field is one of the largest in the world discovered in the last 30 years, with geological reserves in the amount of 4.8 billion tons.

NCOC North Caspian Operating Company B.V. is the only operator of the North Caspian project. The shareholders of the NCOC are: Agip Caspian Sea B.V. (16.81 per cent), KMG Kashagan B.V. (16.81 per cent), ConocoPhillips North Caspian Ltd. (8.4 per cent), ExxonMobil Kazakhstan Inc. (16.81 per cent), Inpex North Caspian Sea Ltd. (7.56 per cent), Shell Kazakhstan Development B.V. (16.81 per cent) and Total E&P Kazakhstan (16.81 per cent).

It is expected that at the stage of experimental-industrial development of the field, production will reach 370,000 barrels per day. After launching the facilities for pumping the associated gas back into the reservoir, the production will increase to 450,000 barrels, while at the second phase the production will reach one million barrels of oil. At the third phase it is planned to reach a record line of 1.5 million barrels per day.

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