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OPEC gives poor marks for Kazakhstan's Kashagan field

Kashagan oil field swallowing up cash with little to show for it, OPEC says.
By Daniel J. Graeber   |   April 10, 2014 at 10:30 AM   |   Comments

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VIENNA, April 10 (UPI) -- While oil supply from Kazakhstan has increased, its giant Kashagan oil field has "sucked in" major capital with little to show for it, OPEC said Thursday.

The Organization of Petroleum Exporting Countries said in its monthly market report oil supply from Kazakhstan increased by 60,000 barrels per day year-on-year to average 1.64 million bpd.

Kazakhstan hosts Kashagan, one of the largest oil fields in the world, with an estimated 16 billion barrels of oil reserves. Production was halted in October, less than a month after it started, when a pipeline associated with the field cracked open.

OPEC said final results from pipeline inspections aren't due until second quarter 2014, though the project has already consumed substantial investments.

"The giant Kashagan project has sucked in almost $50 billion without yielding a barrel of oil," OPEC said in its market report.

The North Caspian Operation Co. has been mum on project developments. OPEC said the Kazakh government was seeking $737 million in damages from the seven-member consortium for "excessive flaring" of natural gas from other projects.

OPEC said total oil supply from Kazakhstan is expected to increase by 9.6 percent by the end of the year despite static first and second quarters.

[OPEC]

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