ConocoPhillips and its co-venturers in the North Caspian Sea Production Sharing Consortium and Kazmunaygaz, the petroleum authority of the Republic of Kazakhstan, have approved the development plan for the Kashagan oil field, a coral reef buried 5 km beneath the north Caspian Sea, 50 km south of the Caspian's northern coast.
With production estimates of up to 13 Bbbl, the Kashagan field is one of the largest discoveries in the last 30 years. Initial production from the field is targeted at 75,000 b/d in 2008. Subsequent phases will bring production to 1.2 MMb/d. To enhance oil recovery and to reduce sulfur handling, the plan includes injection of raw gas back into the reservoir. This will be accomplished by construction of facilities for onshore gas processing and offshore raw gas injection. The capital investment for full field development is estimated at $29 billion, with the first phase expected to amount to $10 billion.
The sanctioned project involves significant technical and technological challenges, including some associated with the harsh climatic conditions. A careful and thorough analysis of how best to preserve the delicate ecological environment proved instrumental in gaining approval of the development plan.
Agip KCO will operate the field on behalf of the companies forming the North Caspian Sea Production Sharing Consortium, including Agip Caspian Sea BV 16. 7%, British Gas 16.7%, ExxonMobil 16.7%, Shell 16.7%, Total 16.7%. ConocoPhillips 8.3%, and Inpex 8.3%.
02/25/04
