In Caspian, Big Oil Fights Ice, Fumes, Kazakhs

On an island in the Caspian Sea, the hub of the world’s largest oil-development project, a thousand men in orange jumpsuits train for catastrophe.

Oil in the Kashagan field here is potentially lethal, with high concentrations of hydrogen sulfide gas. So workers carry oxygen canisters and gas detectors and do daily evacuation drills. High-tech getaway boats stand ready to whisk them to safety. The place feels more like a hazardous-chemical plant than an oil rig.

“One breath would kill you,” says offshore installation manager Ian King.


Since an unlikely alliance of Western oil companies received rights to drill for oil here a decade ago, they’ve struggled to cope with a combination of rig-wrecking ice packs, bone-chilling winters and noxious, high-pressure gases. Yesterday, the consortium’s bid to exploit one of the world’s top oil deposits encountered its biggest challenge yet: Kazakhstan’s government, stung by delays and rising costs, suspended the group’s permit for the field, halting work there for the next three months.

“From today, work on Kashagan will be frozen,” said a Kazakh official.

It wasn’t immediately clear whether the project had been shut down. The field’s operator, Italy’s Eni SpA, declined to comment, saying only that consortium representatives were meeting yesterday with local authorities. Sources close to the negotiations said the delay was an attempt by the Kazakh government to pressure Eni and squeeze additional money out of the project.

Wall St. Journal