ASTANA, March 4 (RIA Novosti) – The head of Kazakhstan’s state energy company said Tuesday that production at a troubled Caspian Sea oil and gas field will likely resume in the second half of 2014.
KazMunaiGaz chairman Sauat Mynbayev said projected production figures and costs would become clearer at the end of March, once investment decisions have been taken on the replacement of a defective gas pipeline at the Kashagan project.
Mynbayev’s cautious remarks appeared to undermine bullish predictions made Monday by the Central Asian nation’s economy minister, who announced that oil output at Kashagan could reach between 2.5 million and 3 million tons in the second half of the year.
Operations at Kashagan, which in 2000 became the largest oil discovery in around four decades, were halted shortly after the field’s launch last September due to corrosion detected in a pipeline carrying gas from the offshore field. The project was suspended in October and a definitive date for operations to restart has not yet been officially announced.
Mynbayev said he could not be certain if the pipe causing the problem would be replaced in its entirety, as assessments have not been completed.
“A definitive assessment is expected by the end of March. And it is too early to talk about concrete expenditure linked to replacement or repairs of this pipe,” he said.
The US Energy Information Administration also predicted last month that Kashagan would restart production in the second half of 2014.
It said in an outlook report that resumption of output at Kashagan could result in a growth in Kazakhstan’s fuel production over the next two years.
The EIA said in a forecast in its Short-Term Energy Outlook Supplement on liquid fuels that Kashagan would ramp up production in 2015. It said that high costs and development challenges would prevent the field from hitting its phase one target of 370,000 barrels per day, however.
Kashagan is operated by an international consortium of energy majors, including Eni, ExxonMobil, Royal Dutch Shell and Total, which all have 16.81 percent stakes. Other shares in the venture are held by China National Petroleum Corp. and Inpex Corp. of Japan, which control 8.33 percent and 7.56 percent stakes respectively. The other 16.88 percent of the project is controlled by KazMunaiGaz.
