Oil lubricates high-level links

energy

By SRI ⋅ July 2, 2008 ⋅

When Kazakhstan’s giant Kashagan oil field was found in 2000, it was the biggest in decades. Few thought then that the Caspian field could be the last such discovery.

By Carola Hoyos (Financial Times)

But even the discovery of large deposits off Brazil, which caused huge excitement in the industry last year, fails to match the oil wealth of Kashagan, the largest oil field outside the Middle East with 13bn barrels of recoverable reserves.

This has led to the belief among oil executives and analysts that there may be no more Kashagans to be found south of the Arctic Circle.

But for all its hydrocarbon riches, Kashagan comes with some serious drawbacks. The field has suffered one delay after another. That has hit Kazakhstan’s relationship with some of the world’s biggest oil companies – including Italy’s Eni, Exxon Mobil and ConocoPhillips of the US, France’s Total, and Anglo-Dutch Royal Dutch Shell.

Kashagan is not the nation’s only field. The projects of Tengiz, Karachaganak, CNPC-Aktobemunaigas, Uzenmunaigas, Mandistaumunaigas and Kumokol already produce 1m barrels a day of liquids, or 70 per cent of the country’s total, with the rest made up by smaller fields.

Other prospects include Khumangazy, near the Russian border, Zhemchuzina, in which Royal Dutch Shell has a large stake, and Kalamkas, discovered in 2001 by Eni.