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Posts Tagged ‘Kashagan’

Another blow to Royal Dutch Shell

Screen Shot 2014-04-06 at 21.01.34Extract from a Steve LeVine article published 6 April 2014 by qz.com under the headline: “Kazakhstan’s largest oilfield will be shut down for at least two years”

Kashagan will be shut for at least two years while specialty pipelines are made to resist the unforeseen impact of toxic gas, according to a source close to the project. In recent weeks, word has dribbled out that Kashagan—one of the largest supergiant oil finds of the last half-century—may lie dormant through the summer…  Already, $50 billion has been spent, and the delay means a delay in billions of dollars in cashflow expected by Kazakhstan itself and major oil companies including ExxonMobil, Shell, Eni, and France’s Total.  …source close to the project said that Shell began a few days ago to notify its employees and contractors of the news of the long delay to restart the field. It remains to be seen how oil and stock markets will react to the news… read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Kashagan oil field: Stuck between ‘a widow maker’ and ‘a rotating bomb’

Western oil majors struggling to restart production at one of the world’s biggest offshore oilfields in Kazakhstan have found that whole kilometres of pipeline are defective, two people recently returned from the $50 billion project say. Oil company investigators have yet to announce conclusions about what went wrong at Kashagan in October, when onshore pipes carrying corrosive gases sprang leaks and brought offshore production in the Caspian Sea to a halt a month after start-up. Last month, infuriated Kazakh officials slapped a $737 million ecological damage fine on the consortium, which includes Eni, Exxon Mobil, Royal Dutch Shell, Total, and Kazakh state-run KazMunaiGas. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Kashagan aka Cash All Gone

Screen Shot 2014-03-10 at 23.56.16Extracts from an article by Rupert Hargreaves published by The Motley Fool on Mar 31st 2014 under the headline: ExxonMobil Is Spending Plenty but Growth Is Just Around the Corner

The Kashagan field is the largest oil discovery in 40 years, and the project to develop the field has required so much investment and expertise that a consortium of oil majors has been required to develop it. The consortium includes Exxon, Royal Dutch Shell , Italy’s Eni , and France’s Total. Kashagan is not just one of the world’s largest oil fields, but it has also turned into one of the most complex and expensive oil projects ever. From an initial cost estimate of $57 billion for the life of the project, its development is now expected to cost a staggering $136 billion over its lifetime — that’s 138% more than originally planned. Exxon and Shell each have just under a 17% stake in the project, amounting to almost $650 billion in revenues each over the life of the project. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

How a Giant Kazakh Oil Project Went Awry

Extracts from a highly informative Wall Street Journal article by , and

…the project has been plagued by budget blowouts, engineering missteps and management disputes extending from offshore roughnecks to top government and corporate leaders. Miles of leaky pipeline make up what is arguably the world’s most expensive plumbing problem. The project is years late, more than $30 billion over budget and now halted indefinitely. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Pipelines and welding risks for Shell: Kashagan and Prelude

Screen Shot 2014-02-12 at 13.18.45…customers of certain Far Eastern shipyards have found that in spite of vessels being delivered with all of the necessary certification, unsurveyed welds have not always been up to the standards of the specific “randomly selected” welds on which the certification had been based. This may have interesting implications for the Prelude vessel…. Since Shell does not seem to be able to ensure that the welds on their pipelines in Kashagan were properly executed, all of which should have been inspected, are they any more likely to be sure of the welds on Prelude?

From an oil industry expert

Mitsui paid $1.1 bn, and Anardarko perhaps $2.66bn to settle their liabilities in respect of Macondo.
 
Mitsui and Anadarko shared responsibility with BP because they were fully appraised of what was going on, and gave their approval to the Macondo operations. Shell is in the same position in Kashagan. It is rather naïve to compare Shell’s role as a partner in Kashagan with that of a shareholder in a public company.
 
In order for partners to give approval they require adequate information, to which they have ready access.
 
See this Wall Street Journal article for more information.
 
On another related subject, customers of certain Far Eastern shipyards have found that in spite of vessels being delivered with all of the necessary certification, unsurveyed welds have not always been up to the standards of the specific “randomly selected” welds on which the certification had been based. This may have interesting implications for the Prelude vessel…. Since Shell does not seem to be able to ensure that the welds on their pipelines in Kashagan were properly executed, all of which should have been inspected, are they any more likely to be sure of the welds on Prelude? read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Cash All Gone

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Extracts from an article by Jim Landers published on 10 March 2014 by The Dallas Morning News under the headline: “Petroleum project costs worldwide benefit Texas prospect”

The cost of developing the world’s largest oil and natural gas fields has reached heights straining the budgets of even the largest oil companies. Royal Dutch Shell, Exxon Mobil Corp., Chevron and Total are all looking to spend less than they did last year on projects that have broken the $50 billion threshold. In Kazakhstan, where several of the biggest oil companies are struggling to bring online the Kashagan oil field beneath the Caspian Sea, project cost estimates have gone as high as $187 billion, according to Offshore Technology.com. Even if the Kashagan field begins production later this year well below that peak cost estimate, it may still take decades before the partners (Exxon Mobil, Shell, Italy’s Eni, Total, KazMunaiGas, IPEX and China National Petroleum Corp.) recover their costs. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

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

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Kashagan Oilfield To Reach Original Production Estimate By 2015

LONDON SOUTH EAST: Thursday, 13th Feb 2014

Costs at the Kashagan site have spiralled in recent years and it has taken 13 years since the beginning of development to reach this point. Once oil starts to flow at the site, Shell, which owns 16.81% of the Kashagan development, is expected to take over management of production operations, along with Kazakhstani state company KazMunaiGas JSC. Shell also will take on planning, development and construction of phase 2 of the project’s offshore facilities, which is designed to bring it up to full production. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Shell’s Recent Profit Warning Won’t Be the Last

Thanks to upstream cost overruns and downstream overcapacity, 2013 probably will not be the last year Shell faces low earnings. Not only is Gorgon facing big challenges, the Shell-ExxonMobil-Total-KazMunaiGas-Eni Kashagan project was recently shut down due to pipeline leaks. The field’s current $50 billion cost is more than five times its original price

By Joshua BondyJanuary 22, 2014

Royal Dutch Shell (NYSE: RDS-A  ) just issued a big profit warning for the fourth quarter of 2013, bringing its expected full-year 2013 earnings to $16.8 billion. This is a significant fall from its 2012 full-year earnings of $27.2 billion. Thanks to upstream cost overruns and downstream overcapacity, 2013 probably will not be the last year Shell faces low earnings.

Downstream challenges
Shell’s refineries put a hole in its Q4 2013 earnings. Its Asia-Pacific and European refineries are facing margin pressures and for good reason. They don’t have access to cheap U.S. crude. They are forced to buy expensive Brent crude and pay a premium relative to U.S. refiners. Also, U.S. refiners have access to cheap natural gas and natural gas liquids. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Crippled Kashagan oil project a bureaucratic “nightmare”

Screen Shot 2014-01-02 at 07.36.30The consortium, which includes ExxonMobil, Royal Dutch Shell, Total and Kazakh state oil firm KazMunaiGas, first put one of the smaller partners – Italy’s Eni – in charge of construction and delivery in 2001/02. They retreated from that decision in 2008/09 after years of delays and cost escalation, opting instead for collective responsibility. “It’s a bit of a nightmare to be honest,” said one industry source with knowledge of the project. Kashagan has cost an estimated $50 billion so far, five times early projections, and its 13-year life is a tale mostly of delay.

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Thu Jan 2, 2014 1:00am EST

* Production halted shortly after start-up by pipeline leaks

* Seven-partner project suffering long delays and cost over-runs

* Now run collectively instead of usual single operator model

* One source calls it a “nightmare” operating “by committee”

By Andrew Callus and Stephen Jewkes

LONDON/MILAN Jan 2 (Reuters) – Giant Kazakh oilfield Kashagan, which was brought to a halt by leaks shortly after start-up last year, is grappling with a bureaucratic “nightmare” on top of its engineering troubles as it strives for commercial production in 2014. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Eni CEO Doesn’t See Kashagan Output Stoppage Running into 2015

Screen Shot 2013-06-25 at 08.12.06

December 6, 2013

A prolonged halt at the Kashagan oil field, which has been plagued by years of delays and cost overruns, could be a drag on the finances of the consortium behind the project, which includes Exxon Mobil Corp, France’s Total SA, Eni and Royal Dutch Shell PLC).

FULL ARTICLE

RELATED REUTERS ARTICLE

World’s costliest oil field arrives, but Kazakh dreams shrivel

A consortium including Exxon Mobil, Royal Dutch Shell, Total and ENI once promised to transform the prospects of the entire country of Kazakhstan and earn massive profits for their own shareholders. But those dreams have shrivelled amid cost overruns, delays, government interference and internal disputes among partners. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Kashagan field commercial production delayed until 2014

Kashagan field commercial production delayed until 2014

08 November 2013

Kashagan is a major oil and gas field in the Kazakh sector of the Caspian Sea with reserves estimated at 38 billion barrels (six billion tonnes) of which eleven billion barrels are recoverable. The field also has over one trillion cubic metres of gas.

The consortium is led by Italian company ENI and commercial production was originally due to start in 2008. In late May 2012, the government of Kazakhstan signed an updated agreement stipulating the start of commercial production before June 2013. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

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

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Bad Omen for the Future of Mega-Oil Projects

Seven years and $24 billion. No, that isn’t the price tag for a major project coming online. That’s how late and how much over budget the giant Kashagan oil project in the Caspian Sea ended up being before it started flowing this week.

Screen Shot 2013-09-16 at 00.01.41

Seven years and $24 billion.

No, that isn’t the price tag for a major project coming online. That’s how late and how much over budget the giant Kashagan oil project in the Caspian Sea ended up being before it started flowing this week. Bringing in multiple stakeholders on these complex, challenging megaprojects in the energy industry has become a pretty nasty cocktail for those involved. Are the blunders with Kashagan an exception or the rule when it comes to these major projects? Let’s look at some other major projects going on right now to see what Big Oil has in store for its next big move. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

World’s costliest oil field arrives, but Kazakh dreams shrivel

A consortium including Exxon Mobil, Royal Dutch Shell, Total and ENI once promised to transform the prospects of the entire country of Kazakhstan and earn massive profits for their own shareholders. But those dreams have shrivelled amid cost overruns, delays, government interference and internal disputes among partners.

Screen Shot 2013-09-12 at 00.53.47

Source: Reuters – Wed, 11 Sep 2013 03:13 PM

* Kashagan pumps first oil a decade later at cost of $50 bln

* Oil majors yet to sanction expansion as returns unclear

* Kazakh leader scales back oil ambitions

By Vladimir Soldatkin and Mariya Gordeyeva

ALMATY/MOSCOW, Sept 11 (Reuters) – When the first drops of oil began trickling from the world’s most expensive oil field on Wednesday, investors in the mammoth Kashagan Caspian Sea project sighed in relief, but they have little chance of earning back their billions any time soon. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Kashagan Oil Field Moves Closer to First Production

Hello John

Just read this stuff below. I forgot how many years this first production is overdue but it could well be 10 years or so! Once they get it going, the production will increase a lot, there genuinely is a lot of oil there!

Shell is one of the joint venture partners.

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By Sarah Kent

LONDON–The giant Kashagan oil field in Kazakhstan has moved one step closer toward first production with the introduction of gas into its offshore facility, the field’s operator said in a statement Wednesday. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.
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