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Page added on November 21, 2013
World’s most expensive oil project starts production
Kazakhstan’s Kashagan super-giant oil field has started production at a rate of around 40,000 bpd.
It is predicted to average 75,000 bpd in 4Q13, the stated target for the initial development stage being 180,000 bpd.
The project, which has been bedevilled by numerous and lengthy delays and an ever-revolving door of partners, has cost more than $41 bn to get to the initial production stage, earning it the title of the world’s most expensive oil project.
A second phase of development will take oil output to 1 mbpd; however, final plans and timing have yet to be agreed, with the expected start-up date of Phase II now beyond 2020.
China’s stake in the scheme
China’s CNPC became the first Chinese company to be involved in the project after securing an 8.33% stake in the scheme earlier this month from KMG for $5bn. It is understood that, in addition to the price paid for its stake, CNPC will carry half of Kazmunaigas’s costs for the second phase of the project.
The deal is also expected to open the way for the reversal of the Kenkiyak-Atyrau oil pipeline, which currently carries oil from the Aktobe region for export through Russia and the Black Sea, creating a continuous pipeline link all the way from the Caspian Sea to China.
To receive a free paper with further information about the Kashagan oil field and the export options for China, email marketing@cges.co.uk
CGES – Centre for Global Energy Studies
7 Comments on "World’s most expensive oil project starts production"
BillC on Thu, 21st Nov 2013 2:48 am
Talk about Peak Oil.
BillT on Thu, 21st Nov 2013 7:15 am
China is lining up oil that does not come in tankers through places controlled by the US. More and more pipelines are being built from sources directly to China. Price is no object when you have 1.3 trillion USD to burn asap. $5B is just interest on a fraction of that. You, the US taxpayer, are paying for that deal, as are Europeans and the Japanese.
westexas on Thu, 21st Nov 2013 12:17 pm
Reportedly, the other name for this oil field is “Cashisgone.”
ronpatterson on Thu, 21st Nov 2013 12:30 pm
Well it has now been delayed for perhaps another year or more.
The sour gas eating Kashagan oil profits
After costing nearly $50 billion, mostly paid by some of the world’s top oil companies, Kashagan may now be delayed until 2015, jeopardising a forecast budget boost for Kazakhstan of $28 billion – about a third – between 2014 and 2016.
Kenz300 on Thu, 21st Nov 2013 1:38 pm
It would be a lot cheaper to transition to safer and cleaner alternative energy sources.
Biofuels can now be made from waste or trash. There is a lot of trash in the world.
Every landfill and dump can be converted to produce biofuels, energy and recycled raw materials for new products………
That would be a much better and longer lasting investment.
rockman on Thu, 21st Nov 2013 2:18 pm
Ken – In general you make a valid point but one would assume the folks investing the $50 billion have run the economics. And even if you’re correct and they are wrong they decide how to spend their money…not you. I just finished discussing a similar situation with one of my coworkers. We might have a value of $X on the books for one of our projects that gives the appearance of a commercial success. But as I often say: there is the plan and then there’s what actually happens. More often than we like the two don’t match up well.
J-Gav on Thu, 21st Nov 2013 6:43 pm
Damn am I impressed! 75,000 bpd for this supposedly humungous money-spinner after $41 billion down the tubes!
Phase II now “beyond 2020.” Well I declare!