ENI starts pumping from huge Kazakh oil field
Barrels in the hundreds of thousands expected per day11 September, 17:04
Kashagan is one of the largest oil fields discovered over the past 40 years, with estimated reserves of about 35 billion barrels of oil in place. Discovered in 2000 and originally scheduled to be active by 2008, the project's original operator was ENI's Agip KCO, but the project suffered a series of delays, forced cost increases and friction with local authorities. In October 2008, the Kazakh government came to an agreement with consortium companies to form the North Caspian Oil Company (NCOC), which took over the operator role from Agip KCO. The co-venturers in the original consortium were made shareholders in NCOC, each holding the same participating interest held in the preceding project agreement.
However, Royal Dutch Shell took control of second-phase development planning from ENI at the start of 2009, according to a 2010 article on Energy-pedia News. Shell radically simplified second-phase design, slashing $18 billion from the estimated cost, reducing it from $68 billion to $50 billion, the energy website said.
ENI, ExxonMobil, Shell, Total and KazMunaiGas each have a 16.81% stake in the project. Inpex owns 7.56%, while ConocoPhillips held a 8.4% stake until earlier this year, when the Kazakh government exercised preemptive rights to acquire it. The Chinese CNPC then bought a 8.33% stake from the government in a deal valued at about five billion euros, according to press reports.
Production is set to ramp up to 180,000 barrels per day (bpd) in the first phase, and 370,000 bpd in the second, a statement from ENI said.
"Considering the dimensions as well as technical, environmental and logistical characteristics, Kashagan represents one of the most complex and challenging industrial projects carried out in the world," said a statement. In 2010, production capacity was projected to be 450,000 bpd in the first phase and one million bpd in the second, Energy-pedia reported.