Kashagan Field

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Kashagan
Region: Pre-Caspian Basin
Country: Kazakhstan
Offshore/Onshore: Offshore
Operators: ENI led consortium (Agip KCO)
Partners: ENI, Shell, Total, ExxonMobil ConocoPhillips, KazMunayGas, Inpex
Field History
Discovery: 2000
Start of production: est 2014
Peak of production: ??
Expected Abandonment: 2040+
Production
Current Production Oil (Bod): none yet, 1.5 million barrels per day (240,000 m³/d) planned peak
Current Production Gas (Mcfd): none
Estimated STOIIP (MMBbl): 38 billion barrels (6.0×109 m3) mid case
Estimated GIIP (Bcf): ?
Producing Formations: Carboniferous limestones

Kashagan Field is an oil field located in Kazakhstan.[1] The field is situated in the northern part of the Caspian Sea close to the Kazakhstan city of Atyrau. The field was discovered in 2000. One of the larger discoveries of this decade, it is estimated that the Kashagan Field has commercial reserves from 9 billion barrels (1.4×109 m3) to 16 billion barrels (2.5×109 m3) of oil. The field is offshore in a harsh environment, where sea ice is present in the winter and temperatures from -35 °C (-31 °F) to 40 °C (104 °F) can be encountered. Production is expected to begin in 2014 at the earliest[2], later than the initial plan date of 2005. It has been designated as the main source of supply for the Kazakhstan-China oil pipeline.[3]

Contents

[edit] History

The Kashagan Contract area covers an area of over 5,500 square km in the Caspian Sea. The field contract area consists of five separate fields, producing formations from the Precaspian Basin. These fields are Kashgan, Kalamkas A, Kashagan Southwest, Aktote and the Kairan. Kashgan was discovered first in 2000 and Kairan most recently in 2003. However some of the later find have yet to be declared commercial such is the extent of the work with just developing Kashgan.[4]

The area covering the Kashagan Contract area has changed hands several times since independence of Kazakhstan. Interest in the Caspian Sea first began in 1992 when an exploration program was begun by the Kazakhstan government. They sought the interest of over 30 companies to partake in the exploration. In 1993 the Kazakhstancaspiishelf (KCS) was formed which consisted of Eni, BG Group, BP/Statoil, Mobil, Shell and Total, along with the Kazakh government. This consortium lasted 4 years until 1997 while the seismic exploration of the Caspian Sea was undertaken.

Upon completion of an initial 2D seismic survey in 1997, KCS became the Offshore Kazakhstan International Operating Company (OKIOC). In 1998 Phillips Petroleum and Inpex bought into the consortium. The consortium changed again slightly when it was decided that one company was to operate the field instead of the joint operatorship as agreed before. Eni was named the new Operator in 2001. In 2001 BP/Statoil also chose to sell their stake in the project with the remaining partners buying their share. As Eni was now the operator the project underwent another change in name to Agip Kazakhstan North Caspian Operating Company (Agip KCO).

BG Group in 2003 attempted to sell their stake in the project to two Chinese companies CNOOC and Sinopec. This however did not go through due to the partners exercising their pre-emption privileges. Eventfully the Kazakhstan Government bought half of BG's stake in the contract with the other half shared out among the five Western partners in the consortium that had exercised their pre-emption rights. The sale was worth approximately $1.2 billion.

On 27 August 2007, Kazakhstan government suspended work at the Kashagan development for at least three months due to environmental violations.[5]

On 27 September 2007, Kazakhstan parliament has approved the law enabling Kazakhstan government to alter or cancel contracts with foreign oil companies if their acting would threaten the nations interests.[6]

In October 2008, AgipKCO handed a US$31 million letter of intent for FEED work on phase two to a joint venture of Aker Solutions, WorleyParsons and CB&I. WorleyParsons and Aker Solutions are engaged also in the phase one, carrying out engineering services, fabrication and hook-up.[7]

[edit] Geology

Kashagan is a carbonate platform of Late Devonian to middle Carboniferous age. The "reef" is about 75 km long and 35 km across with a narrow neck joining two broader platforms (Kashagan East and Kashagan West). The top of the reservoir is about 4500 m below sea level and the oil column extends for over 1000 m. The field is in very shallow water (3 to 9 m deep). The seal is middle Permian shale and late Permian salt. The reservoir consists of limestones with low porosities and permeabilities. The oil is a light oil with 45 API gravity with a high gas-oil ratio and very high H2S content of 19%.[8] The field is heavily overpressured which presented a significant drilling challenge. The figures for oil in place range between 30 and 50 billion barrels (7.9×109 m3) with a common publicly quoted figure of 38 billion barrels (6.0×109 m3). The recovery factor is relatively low (15-25 %) due to reservoir complexity, with between 4 and 13 billion barrels (2.1×109 m3) being the estimated ultimate recoverable resource (8 billion commonly quoted.[9]

Three of the other fields in the contract area, Kashagan SW, Kairan, and Aktote, are also Carboniferous carbonate platforms. Kalamkas offshore has a Jurassic sandstone reservoir.

[edit] Operation

The whole project is expected to cost $136 billion and it is expected to start production from the project's experimental program is late 2012 with production of 75,000 barrels per day of oil. It should reach a production rate of 1.5 million barrels per day towards the end of 2010s.[10]

[edit] Project company

The field is operated by international consortium under the North Caspian Sea Production Sharing Agreement. The Agreement is made up of 7 companies consisting of Eni (16.81%), Shell (16.81%), Total (16.81%), ExxonMobil (16.81%), KazMunayGas (16.81%), ConocoPhillips (8.4%), Inpex (7.56%). The original group included BG Group instead of KazMunayGas, but BG sold its stake to the partners in 2004. KazMunayGas further increased its stakes in January 2008, after its 6 partners and the Government of Kazakhstan agreed on a compensation for the probable 5-year delay that was taken in developing the field. Eni operated this project under the JV company name of AgipKCO (Agip Kazakhstan North Caspian Operating Company N.V.).[11] Following the agreements reached on 31 October 2008 between the Kazakhstan authorities and co-venturers under the North Caspian PSA (NCPSA), operatorship of the NCPSA was formally transferred from AGIP KCO to the new North Caspian Operating Company BV (NCOC) on 23 January 2009.[10]

[edit] See also

[edit] References

  1. ^ Shamil Midkhatovich Yenikeyeff (November 2008) (PDF). Kazakhstan's Gas: Export Markets and Export Routes. Oxford Institute for Energy Studies. http://www.oxfordenergy.org/pdfs/NG25.pdf. Retrieved on 2008-11-12. 
  2. ^ "Kashagan field start-up delayed to 2014". Oil and Gas Journal. 2008-11-04. http://www.ogj.com/articles/save_screen.cfm?ARTICLE_ID=338774. Retrieved on 2008-11-05. 
  3. ^ "Caspian oil exports heading east". Asia Times. 2005-02-09. http://atimes.com/atimes/Central_Asia/GB09Ag02.html. Retrieved on 2007-05-20. 
  4. ^ "Project: Kashagan". Rigzone. http://www.rigzone.com/data/projects/project_detail.asp?project_id=87. Retrieved on 2006-04-26. 
  5. ^ "Astana calls halt at Kashagan". Upstream Online. 2007-08-27. http://www.upstreamonline.com/live/article139447.ece. Retrieved on 2007-08-27. 
  6. ^ "A New Oil Bully in the Caspian?". BusinessWeek. 2007-07-18. http://www.businessweek.com/globalbiz/content/jul2008/gb20080714_206553.htm. Retrieved on 2008-07-18. 
  7. ^ "Trio tuck in to Kashagan FEED". Upstream Online. 2008-10-21. http://www.upstreamonline.com/live/article165149.ece. Retrieved on 2008-10-26. 
  8. ^ Zempolich, W.; Negri, A.; Leo, C.; Van Ojik, K.; Verdel, A. (2002-03-10) (PDF). The Kashagan Discovery: An Example of the Successful Use of a Multi-disciplined Approach in Reducing Geologic Risk. http://www.searchanddiscovery.net/documents/abstracts/annual2002/DATA/2002/13ANNUAL/EXTENDED/46651.pdf. Retrieved on 2008-01-23. 
  9. ^ Eytchison, Patrick (2003). "The Caspian Oil Myth". Synthesis/Regeneration (32). http://www.greens.org/s-r/32/32-25.html. Retrieved on 2008-01-23. 
  10. ^ a b "Change of guard at Kashagan helm". Upstream Online. 2009-01-23. http://www.upstreamonline.com/live/article170381.ece. Retrieved on 2009-01-30. 
  11. ^ "Eni to share Kashagan operator status with other consortium members". Forbes. 2008-01-14. http://www.forbes.com/afxnewslimited/feeds/afx/2008/01/14/afx4526897.html. Retrieved on 2008-06-01. 

[edit] External links

Retrieved from "http://en.wikipedia.org/wiki/Kashagan_Field"
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