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Commercial production started at giant Kashagan oil field

Field in the Kazakh waters of the Caspian Sea considered one of the largest in the world.

By
Daniel J. Graeber
Commercial crude oil from the giant Kashagan oil field off the coast of Kazakhstan has been begun. Photo provided to UPI by the North Caspian Operating Company from its library.
Commercial crude oil from the giant Kashagan oil field off the coast of Kazakhstan has been begun. Photo provided to UPI by the North Caspian Operating Company from its library.

ASTANA, Kazakhstan, Nov. 21 (UPI) -- Commercial production from the giant Kashagan oil field in the Caspian waters of Kazakhstan has begun, a spokesperson for a regional operating company said.

Production at Kashagan, which holds an estimated 16 billion barrels of oil, was halted in October 2013, less than a month after it started, when a pipeline associated with the field cracked open.

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Ainash Chengelbayeva, a spokesperson for the North Caspian Operating Company, said in response to emailed questions the field was now up and running.

"We confirm today's announcement of the Ministry of Energy of the Republic of Kazakhstan that commercial production has begun at the Kashagan field in the Caspian Sea," she said.

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A year ago, the government said total crude oil output would reach 630 million barrels in 2017 and 760 million barrels in 2020 thanks in part to an expansion program planned for the Tengiz field, positioned in the wetlands along the shores of the Caspian Sea.

In 2014, when crude oil prices were above $100 per barrel, Kazakhstan produced around 590 million barrels of oil. Prospects for Kashagan were lowered somewhat because of the technical challenges of operating in an environment rich in corrosive hydrogen sulfide.

The U.S. Energy Information Administration said more than two years ago it expected Kashagan to produce below initial expectations "because technical challenges and high development costs may limit its expansion."

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The NCOC said work is under way to "safely and gradually" increase Kashagan production to the target capacity of 370,000 bpd by the end of next year.

Economists at the Organization of Petroleum Exporting Countries said last month that Brent crude oil prices came under pressure in part from increased output from Russia and Kazakhstan's "massive" Kashagan oil field. OPEC said, however, that its estimate for production for the region was revised lower because of overall declines from Kazakhstan.

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