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Posts Tagged ‘Kashagan’

Costly Risk In New Oil Exploration

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Over the past few years, the large Western oil majors have been plagued by projects running substantially over budget, and taking much longer to complete than initially estimated. These hurdles are part of the broader challenge facing oil companies — how to cope with the end of the era of “easy oil.” Let’s take a closer look at one project — the Kashagan oil field — that epitomizes these challenges.

A primer on Kashagan
Kashagan is a vast untapped oil field in Kazakhstan with massive hydrocarbon potential. Yet, despite its operators — a consortium of companies including ExxonMobil (NYSE: XOM  ) , Eni, and Royal Dutch Shell – having plowed more than $30 billion into the project over the past decade, the field has yet to produce a single drop of oil. read more

royaldutchshellplc.com and its also non-profit 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.

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

royaldutchshellplc.com and its also non-profit 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.

Development challenge of Kazakhstan’s giant oilfield

Kashagan – a giant offshore oil field in the Caspian Sea – The project is better known (in Shell circles) as “Cash all gone”

7 December 2012

By Rayhan Demytrie BBC News, Kashagan oil field, Kazakhstan

t has cost $46bn (£28.8bn) to develop Kazakhstan’s most ambitious project, Kashagan – a giant offshore oil field in the Caspian Sea, the world’s biggest oil find in the past 40 years.

Kashagan holds about 13 billion barrels of recoverable oil. Simply put, it is enough to power the world for up to five months.

Once production starts next year, the majority of Kashagan’s oil will reach markets in Europe and China, making it an important non-OPEC source of energy. read more

royaldutchshellplc.com and its also non-profit 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.

Exxon, Shell Said to Face Delay on Kashagan Output Boost

By Nariman Gizitdinov – Nov 20, 2012 9:45 AM GMT

Exxon Mobil Corp. (XOM), Royal Dutch Shell Plc (RDSA) and their partners in Kazakhstan’s Kashagan oil field face a delay of at least two years on a plan to boost output 20 percent, reducing the time they have to recoup costs in the $46 billion project that’s already running eight years late, according to two people with knowledge of the matter.

Kazakhstan has told the partners to put the $5 billion step-up plan, taking output to as much as 450,000 from 370,000 barrels day, on hold until they study how the start of production next year affects the deposit, the people said, asking not to be identified because the information is private. read more

royaldutchshellplc.com and its also non-profit 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 ‘hands off’ approach pushes up costs

From our November 2005 Shell News Archive

Financial Times: Shell’s ‘hands off’ approach pushes up costs

“Shell’s dependence on contractors may help explain why it has lost control over costs at some of its largest projects. This summer, the company said the price tag of Sakhalin-2, a giant natural gas project in eastern Russia, had doubled to $20bn.”: “Shell has conceded it has a problem.”

Monday 7 November 2005

Shell projects ‘over-reliant’ on contractors

By Carola Hoyos and Thomas Catan in London
Published: November 7 2005

* Concern that handing over critical exploration and production functions is linked to spiralling costs

Royal Dutch Shell is over-reliant on outside contractors to manage its large exploration and production projects, a confidential internal analysis has found.

Ed Merrow, an outside consultant commissioned by Shell to evaluate project management, found the company was almost wholly dependent on contractors for critical functions, including scheduling and cost control. Shell took a “distinctly hands-off approach”, Mr Merrow found. A copy of the presentation, which evaluated 13 projects, was obtained by the Financial Times. read more

royaldutchshellplc.com and its also non-profit 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.

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

royaldutchshellplc.com and its also non-profit 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.

Peter Voser, another Shell CEO tainted by scandal

FROM A SHELL INSIDER

Hello John

No doubt you are already aware, but in these Olympic times with your queen jumping out of a helicopter, one never knows.

You are aware of the growing Libor scandal. I just read that other banks also were involved such as RBS and the Swiss UBS.

Now, who was a director not too long ago in UBS?????

And on another topic, the window of opportunity to drill a well in the arctic is narrowing by the day. Before too long they will have to postpone the whole circus for another 8 months. This will cost a fortune. Not good planning. I see similarities with the Kashagan field. Too little detailed planning upfront, too much arms-length management (the boys know what they are doing) and then things derail. No money has been earned just yet on one of the biggest discoveries in the last few decades. read more

royaldutchshellplc.com and its also non-profit 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, 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

royaldutchshellplc.com and its also non-profit 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’s Foreign Partners to Finance State’s Share of Costs

By Nariman Gizitdinov – May 24, 2012 11:02 AM GMT+0100

Eni SpA (ENI), Exxon Mobil Corp. (XOM) and Royal Dutch Shell Plc (RDSA) agreed to shoulder the investment costs owed by Kazakhstan’s state energy producer for one of the world’s biggest oil fields this year and next.

The international partners, which also include Total SA (FP) and ConocoPhillips (COP), will bear KazMunaiGaz National Co. costs in the offshore Kashagan field for 2012 and 2013, the Kazakh oil and gas ministry said in a statement late yesterday.

“The parties agreed that the consortium will finance the share of KazMunaiGaz’s investments in the project in the period in 2012-2013,” it said. read more

royaldutchshellplc.com and its also non-profit 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.

Kazakhs Consider Bid to Boost Kashagan Oil Cost to $46 Billion

By Nariman Gizitdinov – Jan 11, 2012 6:00 PM GMT

The Kazakh government is considering a request from Exxon Mobil Corp., Royal Dutch Shell Plc (RDSA) and other partners to raise the budget for the first phase of the Kashagan oil project by 20 percent to $46 billion, according to a person with knowledge of the matter.

The international oil companies, which include Eni SpA (ENI) and Total SA (FP), will bear the extra cost themselves, the person said, declining to be identified as the information isn’t public. Kazakhstan’s state energy company, which also has a stake, will reimburse them with barrels of oil for its share once output starts, he said. read more

royaldutchshellplc.com and its also non-profit 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.

Biggest Oil Find in Decades Becomes $39 Billion Cautionary Tale

After 11 years and $39 billion of investment, Exxon Mobil Corp., Royal Dutch Shell Plc (RDSA) and their partners have yet to sell a drop of oil from what was touted as the world’s biggest discovery in four decades.

royaldutchshellplc.com and its also non-profit 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 Expansion May Finish Earlier, KazMunaiGaz CEO Says

October 26, 2011, 7:24 PM EDT

By Nariman Gizitdinov and Hellmuth Tromm

Oct. 27 (Bloomberg) — Royal Dutch Shell Plc and other partners in the Kashagan venture may complete expansion as early as 2017, allowing Kazakhstan to reach its goal of becoming one of the world’s biggest oil exporters faster.

“If the partners will choose the field’s development conception by the end of this year or beginning of next year” and the government approves it, the expansion may be finished by 2017 or 2018, as much as a year earlier than the company previously estimated, said Bolat Akchulakov, chief executive officer of KazMunaiGaz National Co., a partner in the project. read more

royaldutchshellplc.com and its also non-profit 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 giant Kazakhstan oil project in crisis

Royal Dutch Shell and its partners are to ask the Kazakh government for an extension to the 2013 deadline for the first oil from their troubled Kashagan field.

By Richard Orange, Almaty, Kazakhstan

5:40AM BST 01 Jul 2011

Kazakh oil minister Sauat Mynbayev has repeatedly threatened the consortium of oil companies with heavy financial penalties if it misses the 2013 final deadline.

The partners, including Shell, Total, ExxonMobil, Eni and Kazakh state oil company KMG, have repeatedly missed start dates beginning as far back as 2005.

A last-ditch plan to meet the 2013 deadline involved pumping at least 50,000 barrels per day of oil directly onshore, bypassing an unfinished processing plant on an artificial island. read more

royaldutchshellplc.com and its also non-profit 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 shuts Caspian office, $50bn Kashagan project on ice

Royal Dutch Shell will shut its Caspian office for the giant Kashagan oil field at the end of this month, effectively putting the crucial £30bn ($50bn) project on ice for at least two years.

Staff at Shell Development Kashagan in Atyrau have been laid off or relocated and the office closes on May 30. Photo: ALAMY

Richard Orange By Richard Orange, in Aktau 3:32PM BST 24 May 2011

The move followed the Kazakh government’s decision to reject a new lower-cost design for the crucial main development phase of the oilfield which has the potential to produce more than 1m barrels a day.

Staff at Shell Development Kashagan in Atyrau, a port on Kazakhstan’s Caspian coast, have been laid off or relocated over the past few weeks, and on May 30, the office will be closed.

The move follows a warning from Karim Massimov, Kazakhstan’s prime minister, that the project would not go ahead unless the disagreements on cost were overcome. read more

royaldutchshellplc.com and its also non-profit 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 slashes $18bn from Kashagan costs

DAILY TELEGRAPH: Royal Dutch Shell has radically simplified the design of the Kashagan oil development, slashing $18bn (£11.5bn) from the cost of the second phase of development as it strives to make the project economically viable.

By Richard Orange in Almaty
Published: 11:38AM BST 25 Oct 2010

The milestone report from Shell’s Kashagan Cost Reduction Team reduces the cost estimate for the second phase of the project from $68bn to $50bn, a senior Kazakh official told The Daily Telegraph.

Shell took control of the planning of the second phase from Italy’s Eni at the start of last year. The Anglo-Dutch company has been working to turn around the economics of the project, which will take production capacity to 1m barrels per day, from the first phase’s production capacity of 450,000. read more

royaldutchshellplc.com and its also non-profit 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.

Kazakh oil telling for industry’s future

Campbell Keir, director of Royal Dutch Shell in Kazakhstan, says the offshore Kashagan field is one of the most technically challenging fields in the industry, which may be the future of the energy sector.

royaldutchshellplc.com and its also non-profit 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.