|Operator||North Caspian Operating Company (NCOC)|
Royal Dutch Shell (16.81%)
Total S.A. (16.81%)
|Start of development||2001|
|Start of production||2013 (expected)|
|Estimated oil in place||38,000 million barrels (~5.2×109 t)|
|Recoverable oil||13,000 million barrels (~1.8×109 t)|
|Producing formations||Carboniferous limestones|
Kashagan Field is an offshore oil field in the Kazakhstan's zone of the Caspian Sea. The field, discovered in 2000, is located in the northern part of the Caspian Sea close to Atyrau and it is considered the world's largest discovery in the last 30 years, combined with the Tengiz Field.
It is estimated that the Kashagan Field has recoverable reserves about 13 billion barrels (2.1×109 m3) of crude oil. Harsh conditions as sea ice during the winter, temperature variation from −35 to 40 °C (−31 to 104 °F), extremely shallow water and high level of hydrogen sulphide, together with mismanagement and disputes, make it one of the most challenging oil megaprojects. Commercial production is expected to start in the first half of 2013. It has been designated as the main source of supply for the Kazakhstan-China oil pipeline. CNN Money estimates it costs US$116 billion, which makes it the most expensive energy project in the world. Other sources report the cost at up to $50 billion.
Interest in the Caspian Sea first began in 1992 when an exploration program was announced by the Kazakhstan government. They sought the interest of over 30 companies to partake in the exploration. In 1993 the Kazakhstancaspiishelf was formed which consisted of Eni, BG Group, BP/Statoil, Mobil, Royal Dutch Shell and Total S.A., along with the Kazakh government. This consortium lasted 4 years until 1997 when the seismic exploration of the Caspian Sea was undertaken.
Upon completion of an initial 2D seismic survey in 1997, the company became the Offshore Kazakhstan International Operating Company (OKIOC). In 1998 Phillips Petroleum Company and Inpex bought into the consortium. Kashagan was discovered in 2000.
The consortium changed 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 sold their stake in the project to the remaining partners. With Eni as operator, the project was renamed Agip Kazakhstan North Caspian Operating Company NV (Agip KCO).
In 2003, BG Group attempted to sell their stake in the project to two Chinese companies CNOOC and Sinopec. However, the deal did not go through due to the partners exercising their pre-emption privileges. Eventually, in 2004 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. The Kazakhstan's take was transferred to the state-owned oil company KazMunayGas. On 27 September 2007, Kazakhstan parliament approved the law enabling Kazakhstan government to alter or cancel contracts with foreign oil companies if their actions were threatening the national interests.
With President Nursultan Nazarbayev appointing Maksat Idenov  to lead negotiations,  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.). 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.
In October 2008, Agip KCO 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.
In November 2012, ONGC Videsh agreed to buy ConocoPhillips' 8.4% stake. Kazakh government, however, decided in July, 2013 to use its pre-emptive right to buy ConocoPhillips' stake which it sold to CNPC later that year. The deal is already approved by Eni.
On September 11th, 2013, Kashagan began production of oil after years of delay with ExxonMobil and ConocoPhillips increasing production over the next several years. The Oil and Gas Minister of Kazakhstan has estimated the oil field will pump 8 million tons of oil in 2014.
The Kashagan contract area covers an area of over 5,500 square kilometres (2,100 sq mi) and consists of five separate fields, producing formations from the Precaspian Basin. These fields are Kashgan, Kalamkas A, Kashagan Southwest, Aktote and the Kairan.
Kashagan is a carbonate platform of Late Devonian to middle Carboniferous age. The "reef" is about 75 kilometres (47 mi) long and 35 kilometres (22 mi) across with a narrow neck joining two broader platforms (Kashagan East and Kashagan West). The top of the reservoir is about 4,500 metres (14,800 ft) below sea level and the oil column extends for over 1,000 metres (3,300 ft). The field is in very shallow water being 3 to 9 metres (9.8 to 30 ft) 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 hydrogen sulphide (H2S) content of 19%. The field is heavily overpressured which presents a significant drilling challenge. The figures for oil in place range between 30 and 50 billion barrels (4.8 and 7.9 billion cubic metres) 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 (640 and 2,100 million cubic metres) being the estimated ultimate recoverable resource.
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. The field is developed by international consortium under the North Caspian Sea Production Sharing Agreement. The Agreement is made up of 7 companies consisting of Eni (16.81%), Royal Dutch Shell (16.81%), Total S.A. (16.81%), ExxonMobil (16.81%), KazMunayGas (16.81%), ConocoPhillips (8.4%), Inpex (7.56%).
The main development for field operation is a structure named Island D, connected with 12 oil wells. It consists of two trains of production, separating Oil and Gas, delivering them to onshore plant and dehydrating and partly re-injecting the sour Gas in the reservoir. At the moment about 5,000 workers are employed there. Oil is transported to onshore by 92-kilometre (57 mi) long pipeline. Workers are accommodated on the living quarter barge Vivaldi delivered Wagenborg Offshore in cooperation with Wagenborg Kazakhstan B.V. and Ersai Caspian Contractor LLC.
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