Kashagan: Production Halted After Leaking Pipe
Kazakhstan’s giant offshore oilfield Kashagan has halted production for up to four days after an accident, but this will not delay the start of commercial output set for October, Kazakh Oil and Gas Minister Uzakbai Karabalin said on Thursday.
It took nearly 13 years and about $50 billion before first oil was produced at the mammoth field on Sept. 11.
The timely launch of commercial output, due in early October, will mean the multi-national consortium developing Kashagan will meet its obligations under a production-sharing agreement with Kazakhstan and avoid fines.
“Production was stopped yesterday,” Karabalin told reporters. He said the stoppage had been caused by a gas leak from a gas pipeline running from the Caspian Sea to an oil processing plant ashore.
“We believe it will take three or four days to fix it,” Karabalin said.
The emergency situations department of the Atyrau region in western Kazakhstan where Kashagan is located said there was no threat to the personnel. The consortium developing the field could not be immediately reached for comment.
Asked whether the accident could delay the start of commercial output, Karabalin said: “We believe that it should have no impact.”
The target for commercial output under a contract with international oil majors developing the field is 75,000 barrels per day (bpd).
“We are glad our colleagues are actually coping with the task,” Karabalin said. “They had already achieved (production) of 48,000 bpd. In general, the entire system works well.”
The high-pressure reservoir in the shallow area, which freezes during the harsh winter, is estimated to contain 35 billion barrels of oil in place, with 9 billion to 13 billion barrels being recoverable.
Kazakhstan, the world’s ninth-largest country populated by 17 million, is Central Asia’s largest economy and the second-largest oil producer in the former Soviet Union after Russia.
Karabalin said last week that under “a pessimistic scenario” Kazakhstan’s oil output was forecast to exceed 110 million tonnes by 2030. Oil output is officially forecast to rise to 82 million tonnes this year from 79.2 million tonnes in 2012.
Kashagan alone is forecast to produce 8 million tonnes of oil next year, Karabalin said at the time.
KazMunaiGas, Italy’s ENI, U.S. major ExxonMobil, Royal Dutch Shell and France’s Total each hold 16.81 percent stakes in Kashagan. Japan’s Inpex owns 7.56 percent.
China National Petroleum Corp (CNPC) acquired an 8.33 percent stake this year. The deal, estimated to be worth $5 billion, followed Kazakhstan’s decision in July to use its pre-emptive right to buy an 8.40 percent stake from U.S. oil major ConocoPhillips in the field for a similar price. (Writing by Dmitry Solovyov; editing by James Jukwey)
