Kazakh superfield delayed yet again

energy

By SRI ⋅ June 27, 2008 ⋅

Of the 15 former Soviet republics, Kazakhstan is sitting on the sole “superfield” discovered in the last three decades. With proven reserves of 35 billion barrels, Kazakhstan potentially contains the world’s third largest reserves of oil, after Saudi Arabia and Iraq.

The Kashagan Caspian superfield is the largest oil field outside the Middle East and, in terms of reserves, the fifth largest in the world. When fully developed, Kashagan, with its projected peak production of 1.3 million barrels per day, alone will provide foreign consumers more oil than Azerbaijan’s entire current output being shipped through the 800,000 bpd Baku-Tbilisi-Ceyhan pipeline.

Discovered in 2000, Kashagan is situated in the northern part of the Caspian Sea about 50 miles offshore from the Kazakh city of Atyrau. The U.S. government’s Energy Information Administration last month estimated Kashagan’s recoverable reserves as up to 38 billion “probable” barrels, an amount equivalent to the North Sea oil reserves. Kashagan is three times larger than Kazakhstan’s onshore Tengiz field.

The bad news is that the site represents formidable difficulties, lying 14,000 feet below the Caspian at high pressures. Furthermore, Kashagan’s oil is heavily contaminated with mercaptans and hydrogen sulfide, which must be extracted at enormous expense before the oil is ready for export. The final problem for SUV drivers seeking succor at the gas pumps is that the date of Kashagan coming online has been repeatedly pushed back, from a wildly overoptimistic 2005 to 2013, according to KazEnergy Association Chairman Timur Kulibaev.

By John C.K. Daly (UPI)