Kashagan Field

Infobox Oil field
name = Kashagan
region = Pre-Caspian Basin
country = Kazakhstan
coordinates =
locblock =
offonshore = Offshore
operators = ENI led consortium (Agip KCO)
partners = ENI, Shell, Total, ExxonMobil ConocoPhillips, KazMunayGas, Inpex


caption =
discovery = 2000
startofproduction = est 2014
peakofproduction = ??
expectedabandonment = 2040+
currentproductionoil = none yet, convert|1.5|Moilbbl/d|m3/d planned peak
currentproductiongas = none
estimatedstoiip = convert|38|Goilbbl|m3 mid case
estimatedgiip = ?
producingformations = Carboniferous limestones

Kashagan Field is an oil field located in Kazakhstan. 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 convert|9|Goilbbl|m3 to convert|16|Goilbbl|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 earliestcite news | url = http://www.ogj.com/display_article/338774/7/ARTCL/none/none/Kashagan-field-start-up-delayed-to-2014/?dcmp=OGJ.Daily.Update | title = Kashagan field start-up delayed to 2014 | publisher = Oil and Gas Journal |date = 2008-11-04 | accessdate = 2008-11-05] , later than the initial plan date of 2005. It has been designated as the main source of supply for the Kazakhstan-China oil pipeline.cite news | url = http://atimes.com/atimes/Central_Asia/GB09Ag02.html | title = Caspian oil exports heading east | publisher = Asia Times |date = 2005-02-09 | accessdate = 2007-05-20]

Field exploration 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.cite web | title= Project: Kashagan | publisher=Rigzone | url=http://www.rigzone.com/data/projects/project_detail.asp?project_id=87| accessdate=2006-04-26]

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.cite web | publisher=Upstream Online | url= http://www.upstreamonline.com/live/article139447.ece | title = Astana calls halt at Kashagan | date = 2007-08-27 | accessdate=2007-08-27]

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.cite web | publisher=BusinessWeek | url= http://www.businessweek.com/globalbiz/content/jul2008/gb20080714_206553.htm | title = A New Oil Bully in the Caspian? | date = 2007-07-18 | accessdate=2008-07-18]

Field 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%.cite paper
last1=Zempolich | first1=W.
last2=Negri | first2=A.
last3=Leo | first3=C.
last4=Van Ojik | first4=K.
last5=Verdel | first5=A.
title=The Kashagan Discovery: An Example of the Successful Use of a Multi-disciplined Approach in Reducing Geologic Risk
url=http://www.searchanddiscovery.net/documents/abstracts/annual2002/DATA/2002/13ANNUAL/EXTENDED/46651.pdf
format=PDF
date=2002-03-10
accessdate=2008-01-23] The field is heavily overpressured which presented a significant drilling challenge. The figures for oil in place range between 30 and convert|50|Goilbbl|m3 with a common publicly quoted figure of convert|38|Goilbbl|m3. The recovery factor is relatively low (15-25 %) due to reservoir complexity, with between 4 and convert|13|Goilbbl|m3 being the estimated ultimate reserve (8 billion commonly quoted.cite journal
last=Eytchison | first=Patrick
title=The Caspian Oil Myth
journal=Synthesis/Regeneration
url=http://www.greens.org/s-r/32/32-25.html
issue=32
year=2003
accessdate=2008-01-23]

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.

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.), but new operating entity was formed according to the agreement with the Government of Kazakhstan.cite news
publisher=Forbes
title=Eni to share Kashagan operator status with other consortium members
url=http://www.forbes.com/afxnewslimited/feeds/afx/2008/01/14/afx4526897.html
date=2008-01-14
accessdate=2008-06-01]

ee also

*Trans-Caspian Oil Pipeline
*Kazakhstan-China oil pipeline

References

1. [http://www.foeeurope.org/publications/2007/KashaganReport.pdf Kashagan oil field development] 2. [http://www.foeeurope.org/publications/2007/FoEE_Hellfire_Economics_Dec2007.pdf Hellfire economics]

External links

* [http://www.eni.it/eni/internal.do?layout=attivita_e_strategie&mnselected=kashagan_project&channelId=-1610634805&menu=false&mncommand=openById&mnparam=kashagan_project&lang=en ENI - Kazakhstan]
* [http://www2.exxonmobil.com/Corporate/About/OurActivities/NEW_Corp_OA_Up_Caspian.asp Exxon - Kazakhstan]
* [http://www.chevron.com/operations/eurasia/#operations Chevron - Eurasia]
* [http://www.conocophillips.com/NR/rdonlyres/A426FE1A-211A-41F8-86BE-42609DEE6371/0/e_p_pt2.pdf ConocoPhillips - Fact Book]
* [http://www.kmg.kz/main.php?page=inc/posted&mid=16&sid=27&type=subm&showm=15&act=addpost&lang=eng KazMunayGas - North Caspian Project]
* [http://www.inpex.co.jp/english/business/project/caspian.html Inpex - Caspian Region]
* [http://www.agipkco.com AgipKCO]
* [http://silkroadintelligencer.com/tag/kashagan/ Silk Road Intelligencer - Kashagan]