Kashagan stakeholders to pay US$ 1 billion for state investment.

According to Kazakhstan’s oil and gas minister, Sauat Mynbayev, stakeholders in the giant Kashagan oil project have agreed to cover the costs of the state’s investment in the field for the next two years. The total cost of the funding is expected to be just short of US$ 1 billion, coming in at US$ 986 million. Eni, ExxonMobil and Shell will all pay a portion of the costs.

The Kashagan oil field represents the largest oil discovery of the last 40 years and has meant that Kazakhstan, a country only four times the size of Texas, controls roughly 3% of the world’s recoverable oil reserves.

The country hopes that the development of the Kashagan field, which contains an estimated 9 billion barrels of oil, will be the driving force behind plans to increase annual oil output by 60%. Having recovered from particularly hard times in the post Soviet era, Kazakhstan is now the largest economy in Central Asia and has become increasingly assertive in its dealings with foreign oil companies.

Production is currently slated to begin by the end of this year or early 2013 with a production rate of 370 000 bpd, which may well rise to 450 000 bpd.

Stakeholders in the project have signed a purchase agreement with KazTransGas, which states they must supply 83% of gas from the first phase of production to the domestic Kazakhstan market.

Edited from various sources by David Bizley

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/28052012/kashagan_stakeholders_cover_costs_of_government_investment/