Kazakh Giant Kashagan Oilfield Resumes Output After Accident

08.10.2013 -

A consortium developing Kazakhstan's giant Kashagan oilfield has resumed production after an industrial accident halted work last month, the Kazakh Oil and Gas Ministry and the consortium said on Monday.

Work at the offshore field - one of the world's biggest oil finds in decades - stopped on Sept. 25 after a gas leak was detected, but the ministry said in a statement it started again "without complications" on Oct. 6.

The field's developer, the North Caspian Operating Company, said "all operations were conducted under strict procedures and in line with national and international safety rules."

Kashagan, a high-pressure oilfield in the Caspian Sea off western Kazakhstan, only launched output on Sept. 11. It had taken about 13 years and some $50 billion to produce the first oil.

The field had originally been due to produce oil in 2005 but technical problems and cost overruns caused delays.

Kazakhstan, with a population of just 17 million, is the second-largest oil producer in the former Soviet Union after Russia.

The country's hopes of future prosperity are pinned on Kashagan, which is estimated to contain 35 billion barrels of oil in place, of which 9 billion to 13 billion are recoverable.

Kashagan alone could contribute 8 million tons of oil to Kazakhstan's overall oil production next year, according to Kazakh Oil and Gas Minister Uzakbai Karabalin.

The country's oil output is forecast to rise to 82 million tons this year from last year's 79.2 million. Karabalin has said, that even under a "pessimistic scenario," it could exceed 110 million tons by 2030.

He has said that, before the accident, the Kashagan consortium was producing 48,000 barrels of oil per day (bpd) and was set to achieve the level of commercial production - 75,000 bpd - in October, meeting its contractual obligations.

Kazakh state oil and gas firm KazMunaiGas, Italy's ENI, U.S. major ExxonMobil, Royal Dutch Shell and France's Total each hold 16.81% stakes in Kashagan. Japan's Inpex owns 7.56%.

China National Petroleum Corp (CNPC) acquired an 8.33% stake this year. The deal, estimated to be worth $5 billion, followed Kazakhstan's decision in July to use its pre-emptive rights to buy an 8.40% stake in the field from U.S. oil major ConocoPhillips for a similar price.