August 27, 2008

Talks on Major Kazakh Oilfield End

Following is an excerpt from Andrey Stepanov's report published by the Kazakh newspaper Novoye Pokoleniye on 8 August

Last week, information blockade around Kashagan, the largest oil and gas project in the Kazakh section of the Caspian Sea, was lifted. Luciano Vasques, the regional director of the Agip KCO consortium, which is developing Kashagan, told the Kazinform state agency in an interview that the extraction of oil in Kashagan could start before October 2013.

He confirmed that negotiations between international consortium participants and the Kazakh government within the framework of the production sharing agreement (PSA) on the North Caspian Sea ended. After a detailed assessment and discussion of logistical support and process design issues related to the project, both sides agreed that October 2013 will be the deadline for the start of commercial extraction in Kashagan. At the same time, all efforts will be made to start commercial extraction ahead of schedule.

Denying rumours about a deliberate delay of the project, Mr Vasques said: "The development of the project was not slowed down". He said that the first stage of Kashagan's development or the experimental programme (EP) is at its implementation phase. Two artificial islands are ready and two more are being constructed. Several giant barge-modules were delivered to the Caspian Sea for the completion of the D island, which will become the offshore treatment technological complex [of the] EP. The Bolashak onshore processing facility is being built in western Yesken. The estimated capacity of the processing facility at the EP stage, will be about 20.9m t [of oil] per year, which is 450,000 barrels of oil per day. As of today, five wells have been fully completed, tested and made ready for exploitation with the potential production capacity of 170,000 barrels. "As for the development of the entire Kashagan deposit, we call it the full-scale field development," Mr Vasques said. "The total average level of extraction at this stage is about 70m t of oil per year or 1.5m barrels [per day], which is comparable to or exceeds the annual oil production rate of some countries, for instance, that of Canada, the UK and Brazil," he added.

[Passage omitted: the Reuters news agency reported on 14 January that the Kazakh national oil and gas company KazMunayGaz became one of the four operators of the Kashagan deposit having doubled its shares in the project; background on the consortium]

Originally published by Novoye Pokoleniye, website Almaty, in Russian 8 Aug 08.

(c) 2008 BBC Monitoring Central Asia. Provided by ProQuest LLC. All rights Reserved.