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Posts Tagged ‘Kazakhstan’

Oil From $50 Billion Kashagan Field Starts Flowing to Export



By Nariman Gizitdinov: 14 October 2016

Kashagan, a vast oil field in the Caspian Sea, sent its first crude for export after about 16 years in development and more than $50 billion of investments.

The venture loaded 26,500 metric tons of crude for export into the country’s pipelines, Kazakhstan’s Energy Ministry said in an e-mailed statement. Of that, 7,700 tons was sent to the Caspian Pipeline Consortium. Reaching stable production will take “some time” as commissioning work continues both offshore and onshore, the ministry said.

The project has been plagued by multiple delays and cost overruns. A 2008 budget estimate of $38 billion jumped to $53 billion by the end of last year as the partners replaced undersea links after sour gas cracked the pipes. The crude from Kashagan is reaching an already saturated market, with prices at less than half the level of 2013 when the project hit a setback. Expectations for the field’s exports even prompted OPEC to flip supply predictions for next year. read more

Shell gets go-ahead for frontline robot to monitor Kazakh site


Andrew Ward, Energy Editor: September 13, 2016

Royal Dutch Shell has developed a robot to monitor equipment and carry out safety checks at a remote facility in Kazakhstan — marking one of the most sophisticated examples of robots replacing humans on the front lines of the oil industry.

Shell said the Sensabot was undergoing final testing in the Netherlands before being deployed to Kazakhstan. The group plans to roll it out to other remote oilfields, as well as potential roles in refineries, chemical plants and LNG terminals. read more

Shell heading for $1.6bn battle over BG’s Kazakhstan gasfield

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Screen Shot 2016-03-15 at 10.34.57Marcus Leroux: April 6 2016

Royal Dutch Shell’s newly acquired BG assets have drawn it into an impending $1.6 billion bust-up with the government of Kazakhstan.

The central Asian country has filed a claim against a group of oil and gas companies, led by BG and Eni, of Italy, relating to the share of the spoils that it will receive from the huge Karachaganak gasfield. The claim, disclosed by Lukoil, another partner in the field, is slightly less than an original estimate of $2 billion. read more

Merger of Royal Dutch Shell and BG Group

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Published by Joshua NoonanSeptember 27, 2015

With the declared April 2015 merger of Royal Dutch Shell and BG Group, formerly British Gas, a combination of assets spanning continents is occurring. The completion date of the merger in early 2016 has had some roadblocks. In Kazakhstan’s Karachaganak Field project, the combined group could lead to Shell to hold 29.5% by 2016. Despite this, the government of Kazakhstan may be blocking the transfer of shares.

The Karachaganak Field is a gas condensate field in northwestern Pre-Caspian Basin nearly one hundred miles east of Oral.The Field was discovered in 1979, with production starting in 1984. Upon independence, AGIP, currently Eni, and British Gas, now BG Group won exploitation rights. Thence, in 1997, Texaco (currently Chevron) and Russia’s Lukoil alongside the original signatories and two companies signed a production sharing agreement for forty years. BG Group and Eni possess 29.25% share a peace and Chevron has 18% and Lukoil has 13.%. Upon arbitration and a December 2011 acquisition, KazmunayGas purchased a 10% stake for two billion USD cash and one billion in non-cash consideration. read more

Why Shell May Get Less Than It Bargained For In BG Deal

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Screen Shot 2015-05-10 at 22.33.15By Andy TullyPosted on Tue, 19 May 2015 

Royal Dutch Shell’s $70 billion purchase of BG Group may not be as attractive as it once seemed.

According to BG’s 2014 annual report, if British-based BG were to be taken over by another company, the government of Kazakhstan would have the right to buy BG’s 29.25 percent share in a valuable Kazakh gas field, which so far has represented some 15 percent of the company’s total production and 9 percent of the $19 billion in revenue it made last year. read more

Kashagan to Start Production in 2017, Says Royal Dutch Shell Report

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ASTANA – Production at Kazakhstan’s giant Kashagan offshore oil field is expected to restart in 2017, Royal Dutch Shell stated in its 2014 annual report.

“After the start of production from the Kashagan field in September 2013, operations had to be stopped in October 2013 due to gas leaks from the sour gas pipeline. Following investigations, it has been decided that both the oil and the gas pipeline will be replaced. Replacement activities are ongoing, with production expected to restart in 2017,” page 27 of the annual report, released on March 12, said.

After sour gas leaks forced production to halt soon after it began in late 2013 – already years behind the original schedule – predictions as to when the project would actually produce have been repeatedly made and then pushed back, and even in late January of this year, Energy Minister Vladimir Shkolnik was announcing that Kashagain would come online in late 2016. read more

Report: Exxon May Take Over as Kashagan Operator

Screen Shot 2014-04-06 at 21.01.34Extract from a Reuters/Rigzone article by Dmitry Zhdannikov, published Friday 6 June 2014

LONDON, June 6 (Reuters) – U.S. oil major Exxon Mobil is in line to take over as operator of the giant Kashagan field in an attempt to fix the beleaguered $50 billion project offshore Kazakhstan, industry publication Nefte Compass reported on Friday. The Kashagan shareholders are Eni, Exxon Mobil, Royal Dutch Shell, France’s Total and Kazakh state oil company Kazmunaigas, each with 16.8 percent, and Japan’s Inpex and China National Petroleum Corp. (CNPC) as junior partners.



Kashagan Appoints Exxon Executive To Run Troubled Oil Venture

ALMATY, June 6 (Reuters) – The troubled Kashagan oil development has named an executive from U.S. firm Exxon Mobil to run the venture while also streamlining its complicated structure in an attempt to fix the beleaguered $50 billion project offshore Kazakhstan. The group said on Friday Stephane de Mahieu, an Exxon secondee, had become managing director as of May 1, 2014. However, it denied a report in industry publication Nefte Compass that Exxon would take over as operator of Kashagan saying that instead all seven oil firms involved will be effectively operators through a rejigged venture. read more

Kashagan ‘Cash All Gone’ Pipeline Debacle

Shell has been a key participant in the Kashagan project consortium which includes Eni and ExxonMobil. Given its notorious track record of over-promise and under delivery, having Shell involved is a bad omen for any elephant project.

By John Donovan

The latest news from the “Cash All Gone” project (as it is widely known) is that due to the need to replace fatally flawed leaking pipelines, the oilfield may not restart until 2016. 

The project is already years behind schedule and countless billions over budget.

I have received some related comment and questions from a retired Royal Dutch Shell EP expert that deserve to be put into the public domain.

Shell has been a key participant in the Kashagan project consortium which includes Eni and ExxonMobil. Given its notorious track record of over-promise and under delivery, having Shell involved is a bad omen for any elephant project.  read more

Kashagan project closed indefinitely

Screen Shot 2014-04-06 at 21.01.34Extract from article by James Burgess published 23 April 2014 under the headline: “Kashagan Field Plans Pipeline Replacement”

After weeks of review, the operators of Kazakhstan’s giant Kashagan oil field have concluded that pipelines carrying oil and gas will need to be replaced due to extensive damage. The consortium — which includes Eni, Total, Royal Dutch Shell and ExxonMobil — has been repeatedly frustrated by delays and engineering obstacles. With the discovery of the severely corroded pipelines, the project, which was shut down in October 2013 after a brief start, is now closed indefinitely. read more

Kazakhstan sues Kashagan oil group for $737 mln in pollution case

Extracts from article by Dmitry Solovyov published on 7 March 2014 by Reuters

Screen Shot 2014-03-07 at 08.15.05ASTANA, March 7 (Reuters) – Kazakhstan is suing the multinational consortium developing the huge Kashagan oilfield in the Caspian Sea for 134.2 billion tenge ($737 million) over damage to the environment, the Environment Protection Ministry said on Friday. Production at Kashagan, the world’s biggest oil discovery in 35 years, which took 13 years and some $50 billion to bring onstream, began in September but was stopped just weeks later after gas was found to be leaking from its pipelines.  Exxon, Royal Dutch Shell, Total, Eni and Kazakh state oil company KazMunaiGas each hold a 16.81 percent stake in Kashagan. read more

China Gains New Friends in Its Quest for Energy

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A version of this article appears in print on September 24, 2013, on page A4 of the New York edition

ATYRAU, Kazakhstan — On the northern reaches of the Caspian Sea, not far from this old Soviet town known for its oil and sturgeon, lies a vast new oil find, the biggest outside the Middle East. China was rebuffed when it asked for a stake 10 years ago.

But when the pumps finally started this month, the China National Petroleum Corporation had won a share in the project, known as Kashagan, and President Xi Jinping was in the region recently to celebrate, another indication that China’s influence has eclipsed even Russia’s across the former Soviet republics of Central Asia. read more

Massive Oil and Gas Plant Opens in Kazakhstan

Screen Shot 2013-01-24 at 22.09.48The facility, that operates with involvement from Royal Dutch Shell, will process 450,000 barrels of oil and 8.8 cubic meters of gas at full production.

June 1, 2013: ASTANA — British Prime Minister David Cameron unveiled a massive oil and gas processing plant on the shores of the Caspian Sea on Monday during his first visit to ex-Soviet Kazakhstan.

The British leader landed in the oil capital of Atyrau on the Caspian Sea on Sunday where he was met by Kazakh President Nursultan Nazarbayev.

Cameron is leading a large business delegation to the resource-rich Central Asian nation and hopes to sign trade deals worth more than £700 million (US$1.06 billion). read more

A $30 Billion Hole in the Caspian Sea?

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For more than a decade, the promised bonanza from Kazakhstan’s giant offshore Kashagan oil field has been a costly mirage for its developers. And the wait still isn’t over.

The companies backing the project—which include Exxon Mobil Corp., Eni Spa and Royal Dutch Shell PLC—in March missed the startup date Eni predicted last year. And now, after a decade of work and more than $30 billion in expenses, it isn’t clear when one of the world’s biggest untapped fields will produce its first drop of oil. read more

Kazakhstan high on Shell’s Superbucket list

Given Shell’s history of operation in Nigeria (along with Chevron, Exxon, etc.) , and the way the company likes to operate in 3rd world regions, it is clear why Shell (along with the other super majors) has focused on Kazakhstan. It is a country rich in hydrocarbon resources. It is also another country that is run by a corrupt, dictatorial government that can be ‘influenced’ to come around to the oil companies’ way of thinking. Ideal for Shell.



In Peter Voser’s recently published ‘bucket list’ of key geographical areas of planned future operation it was noted that Kazakhstan was very high on Shell’s investment priority list. Attached are a few links that explain why Royal Dutch Shell and others are so interested in Kazakhstan.

This should come as no surprise to anyone familiar with the oil industry and the way Shell operates. The Caspian Basin has vast reserves of oil and gas, estimated to be second only to the Middle East despite that fact that oil and gas have been produce in the region for about 150 years. The political leadership in Kazakhstan is a corrupt dictatorship, and the Caspian Basin is one of the most heavily polluted areas of the world. There are effectively no environmental pollution issues to contend with in Kazakhstan. read more

Exxon, Shell Said Seeking Control of $46 Billion Kashagan Field

By Nariman Gizitdinov on August 30, 2012

Exxon Mobil Corp. (XOM) and Royal Dutch Shell Plc (RDSA) are seeking bigger stakes in the Kashagan oil field and operating control before starting to expand the $46 billion project, according to two people with knowledge of the matter.

Exxon and Shell also want Kazakhstan’s government to extend the production-sharing agreement for 20 years before investing more in the Caspian Sea field, touted as the world’s biggest discovery in four decades when found, the people said, declining to be identified as the talks are confidential. read more

Eni, Exxon, Shell to Fund $986 Million Kazakh Share for Kashagan

By Svetlana Antoncheva and Nariman Gizitdinov – May 28, 2012 6:48 AM GMT+0100

Eni SpA (ENI), Exxon Mobil Corp. (XOM) and Royal Dutch Shell Plc (RDSA) agreed to fund the $986 million costs owed by Kazakhstan’s state energy producer for one of the world’s biggest oil fields, Oil and Gas Minister Sauat Mynbayev said.

The foreign partners will pay Kazmunaigaz’s share of the costs for Kashagan this year and next, Mynbayev told reporters in Astana today. It wasn’t clear if Kazmunaigaz will repay its foreign partners out of future revenue from the project. read more

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