Peak production at Kazakhstan’s giant Kashagan oil field, the world’s largest oil discovery in the last 30 years, could be 25% higher than originally expected, raising output to around 1.5 million barrels per day.
Kashagan, operated by Italian firm, ENI, will sustain peak production for more than ten years, meaning it will yield 10% more reserves than currently estimated.
The oil field in the Caspian Sea will yield well over the 13 billion barrels originally forecasted by the US Energy Information Administration, and is particularly important given the concerns for increasing oil demand fuelled by access problems in Iraq.
But extreme climatic conditions soaring summer temperatures, winter temperatures of minus 40 degrees centigrade and dangerous levels of poisonous hydrogen sulphide, make Kashagan one of the world’s most difficult fields.
For this reason, oil will not flow until at least 2009, despite claims that the field would start pumping oil in 2005.
“Some technical issues need to be addressed, above all to do with the safety of the workers,” said Baktykozha Izmukhambetov, Kazakh energy and mineral resources minister, at the Kazakh oil conference in Almaty.
Already the world’s most expensive energy project, Kashagan is now expected to cost at least US $30 billion. Total of France, Royal Dutch Shell, ExxonMobil and ConocoPhillips of the US, Inpex of Japan and KazMuneiGaz are all involved in the project. Disputes among the partners have also slowed proceedings.
It is thought, by the US at least, that the Kashagan oil field will play a key role in reducing reliance on OPEC and Russia.
“Kashagan is part of the new energy geopolitics being driven by the US. The field is large and significant and pulls the centre of gravity away from Russia and the Middle East,” said Joseph Stanislaw, president of the advisory firm, JAStanislaw.
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