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It’s a pleasure to be interviewing you. Firstly, explain the goals and objectives of the NCOC.

To help you and your readers better understand it, I will try to give a broader picture of where we stand.

The North Caspian Operating Company B.V. (NCOC) acts on behalf of seven Consortium partners including KMG, Eni, Shell, ExxonMobil, Total, Conoco and Inpex.

NCOC acts as the designated operator appraising and developing the hydrocarbon assets of 11 offshore blocks under the North Caspian Production Sharing Agreement.

As you might know, apart from the Kashagan field, other assets within the 5,600 square kilometer NCSPSA contract area include Kalamkas, Kashagan South-West, Aktote and Kairan fields.

So as the Operator, NCOC defines and then steers the overall strategy of the Venture, ensures planning and coordination, manages geosciences and conceptual studies, and interfaces with stakeholders – particularly the Consortium members, government bodies and the authorities.

The development of Kashagan has faced many delays in the past – how is the project developing now?

According to the New Operating Model which had been introduced in 2008, NCOC acts on behalf of the Consortium.

There are four agent companies which are delegated with the execution of operations.

Let me briefly explain this to you: Agip KCO is responsible for delivery of the Experimental Programme (including drilling); Shell Development Kashagan (SDK) and Agip KCO have been delegated to deliver Phase 2, the surface facilities of the Kashagan project. SDK will manage the Phase 2 Front End Engineering Design, and then planning, development and construction of the offshore parts of the project. Agip KCO is responsible for the planning, development and construction of the onshore elements; ExxonMobil Kazakhstan Inc. (EMKI) is responsible for the appraisal  and Phase 2 drilling activities; and finally, a KMG Kashagan B.V. and Shell Kazakhstan Development B.V. (SKD) joint venture (NCPOC) will manage production operations of all phases.

Now – coming back to your question on the current status. Given its size and technical complexity, the Kashagan field is developed in phases. Phase 1, which we call the Experimental Programme, is currently nearing completion and readying for project start-up.

The Kashagan is one of the largest finds in recent times, but when will see production commence at the field & what production levels do you foresee.

First of all, one needs to differentiate between the first oil and the Kashagan Commercial Production (KCP). Our obligation is to reach KCP before a certain date. As for the first oil, AKCO, the Agent company responsible for delivering the EP, is making all reasonable efforts to achieve it as promptly as practicable.

As for the production levels, as with any project of this nature, they will ramp up progressively after start-up.

Final Phase I production levels are dependent on a range of factors, some of which will only be fully understood when the facilities are producing hydrocarbons.

However, with its current configuration, Phase 1 is designed to have a nominal oil production capacity of 370,000 barrels of oil per day.

This capacity could be increased to 450,000 bbl/day when additional gas injection facilities boosting production become available.
Also, in terms of other assets within the NCSPSA contract area, the Kalamkas Sea is at the conceptual stage and we are hoping to make some progress on it in 2012-13.

I understand that the Kashagan has brought about many technological challenges, because of its geology, location & high pressures all in such harsh conditions. How have you overcome the many technology hurdles, and what has been your biggest technical challenge to date?

It is true that there are only a few more challenging fields than the Kashagan. Let me explain why.

Located in the northern part of the Caspian Sea, Kashagan is the first offshore oil and gas project in Kazakhstan and one of the biggest and most technically complex projects currently being developed anywhere in the world.

Add to that the ecologically sensitive environment of the North Caspian, high sour gas content as well as shallow waters posing logistic challenges – and you begin to understand some of the major challenges faced by the Consortium every day.

These difficult conditions require for some of the safest and most sophisticated technologies.

There are many pieces of innovative technology that have already been or are planned to be implemented on the project and listing all of them might take up the whole magazine.

So I am going to focus on some of them.

First of all, there are artificial islands which have already become a visual symbol for the Kashagan project.

Due to the shallow water and cold winter climate, it is not possible to use conventional drilling and production technologies – such as concrete structures or jacket platforms. So to protect offshore facilities from harsh winters and pack ice movement, the Consortium decided to install them on artificial islands.

There are two main types of islands – small unmanned ‘drilling islands’ and larger manned ‘hub islands’. In the unlikely event of a spill, the sea and seabed are protected by an impermeable geotextile membrane deployed over the entire surface of the island.

Another one I’d like to mention is our state-of-the-art pipe laying technique as it reflects our focus on environmental responsibility.

According to the development concept, there are hundreds of kilometres of large-diameter pipe that have to be laid between drilling islands and hub islands or between a hub island and an onshore processing plant.

So we have used a special technique to trench, lay and backfill simultaneously. This reduces disruption to the seabed by limiting activity to directly above the pipe laying operation. The conventional method leaves trenches open over the 3 stages, which can cause harm to the environment. Unlike that, the new technique allows the environment to recover in a matter of weeks.

Environmental compliance has been an issue in the past with regards to the field development. With the environment such a sensitive issue at the moment, how are you achieving you environmental obligations & what impact has the project had on the diverse natural surroundings?

First of all, I want to share a personal account – As External Relations Director, I often visit the project’s facilities. As the helicopter takes off from Atyrau and travels offshore, you get a fantastic view of beautiful environment in which we operate. It’s always a reminder of the significant importance that we need to place on environmental responsibility.

Our activities are guided by Environmental Protection Plan that is approved annually by the RoK Ministry of Environmental Protection.

Just to give you a quick overview of the scale of our environmental activities.

Between 1993 and 2010 the consortium completed 36 separate offshore monitoring surveys covering water quality, bottom sediments quality and biological data.

And between 2001 and 2010 we have undertaken 30 onshore monitoring surveys particularly focusing on soil and groundwater.

We continuously seek to improve our knowledge of the environment in which we operate and therefore limit our impact on the Caspian Sea bio system.

The Consortium has conducted studies of the Caspian Seal through Caspian International Seal Survey (CISS) that includes both national and international experts.

These detailed studies consist of three main activities:
»    winter aerial population surveys to count seal population during pupping period
»    icebreaker impact studies
»    satellite telemetry study of seal movement patterns and habitat usage.

In addition to that, The Caspian Sea is situated on major migratory routes for many birds, many of which are listed in Kazakhstan’s Red Data Book.

Since 2000, our consortium has made annual observations of bird species in the Mangistau and Atyrau regions in order to better understand wintering activities, seasonal migration and nesting habitats. The information gathered allows us to minimise impact on bird populations.

While we place utmost importance on the environment, we do recognise that there is always room to improve and we remain committed to working with the MEP to do so.

To conclude, I think that our many activities contribute to maintaining Kazakhstan’s status as an environmentally responsible country.

Recovery rates for the field are expected to be low; what EOR plans do you have?

As I mentioned earlier, Phase I production levels are dependent on a range of factors.

With its current configuration, Phase 1 is built to have a nominal oil production capacity of 370,000 barrels of oil per day.

NCOC is currently reviewing conceptual options for the future development of the field.

This envisages an installation of additional gas compressors that would allow the Consortium to use full capacity of Phase 1 (nominal production capacity of 370,000 increased to 450,000 bbl/day).

What importance does the Kashagan project have for the future of Kazakhstan and what lies ahead for the NCOC?

Having recently celebrated its 20th year of independence, Kazakhstan is aspiring to rank among the largest oil exporters in the world in the coming years.

And I am absolutely sure that the NCSPSA Project is going to play a key role in achieving this goal.

The Project has already brought significant benefits to Kazakhstan.

For example, between 2006 and end 2011 the Consortium spent more than US $7 billion on local goods and services.

The Consortium employed over 17,000 citizens of Kazakhstan as of early 2012.

Close to 80% of those employed in Kazakhstan are Kazakhstani which is an outstanding ratio for this type of project.

In terms of social performance, between 1998 and the end of 2011, 142 Social and other Infrastructure projects (SIP) were completed in close collaboration with local authorities in the Atyrau and Mangistau oblasts. This covers construction of schools, kindergartens, hospitals, sport facilities and other infrastructure designed to benefit the community including construction of roads, electrification, gas and water supply.

In addition to social infrastructure projects, NCOC responds directly to the development aspirations of local communities through the management of its Sponsorship and Donations programme. Supported projects are focused on economic sustainability and welfare, health, education, culture, cultural heritage, sports or unprivileged people.

So in 2011 alone, 104 Sponsorship and Donations (S&D) projects were completed in the Mangistau and Atyrau regions.

Pierre Delpont
French citizen, born in Toulouse on 25/06/1948.

Joined TOTAL Exploration & Production in 1972 as Production Engineer after graduating in Geology and Petroleum Engineering from “Ecole de Géologie” (Nancy) and “Ecole des Pétroles” (Rueil-Malmaison).

Occupied various positions with TOTAL head office and subsidiaries in France and abroad (Algeria, United Arab Emirates, Indonesia, The Netherlands, Thailand) in Exploration & Production activities, covering reservoir and production engineering, planning engineering, petroleum operations, business development and corporate planning with significant management responsibilities.

Presently seconded by TOTAL as External Relations Director to North Caspian Operating Company, Operator of the North Caspian Production Sharing Agreement in Kazakhstan.

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