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Kazakhstan holds second largest oilfield in the world

Kazakhstan’s oil industry is predicting extraordinary growth over the next decade, a lot of this growth is due to an influx of capital into the country, which has seen the former soviet republic’s oil production finally start to rise after decades of under investment. In fact, in the 19 years since independence from the Soviet Union the country has attracted total Foreign Direct Investment of US$ 122 billion, this makes up 80% of all the investment into the five Central Asian republics of the former Soviet Union

The Kashagan field will also significantly contribute towards growth in oil revenues. The field lies under the Caspian Sea and is operated by KMG, the state-owned oil company, and four international oil majors. Currently the field is anticipated to come onstream in 2012, with production rising to 109.5 million barrels per year by 2014.

To cope with such large quantities of oil, Kazakhstan is developing a 4545 mile long, 500,00 barrel per day overland pipeline to carry the oil from Kashagan to Kuryk on the Caspian sea where a new terminal is being built.

However it has not been easy to get to this point, due to the shallowness of the Caspian Sea, weather conditions can be very treacherous and this has required the construction of artificial islands to protect drilling operations. The oil reserves also have a high proportion of natural gas under high pressure making the field potentially lethal to tap, along with high levels of sulfur, which may make the oil inflammable.

However, the Energy Information Administration of the US Department of energy has estimated the recoverable reserves at 11 billion barrels, and this may be a conservative estimate. KMG are predicting that production will reach 365 million barrels per year by 2016 when Phase 1 of the field’s development is completed. Production is expected to reach 1.5 million barrels per day after Phase 2 of field development is completed in 2019.

Published on 12/04/2011


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