SEPT. 25 2013 (The Conway Bulletin) — Less than two weeks after the start of official production, a gas leak halted oil output at the Kashagan field in the Caspian Sea. The gas leak was relatively minor, energy minister Uzakbai Karabalin said, and it wouldn’t delay the start of commercial oil production next month.
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(News report from Issue No. 154, published on Oct. 2 2013)
SEPT. 11 2013 (The Conway Bulletin) — After years of delay and billions of dollars of cost overruns, the consortium developing the Kashagan oil field in the Kazakh sector of the Caspian Sea celebrated its first oil. Kashagan is considered vital to Kazakhstan’s ambition to become a major global oil supplier.
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(News report from Issue No. 152, published on Sept. 18 2013)
SEPT. 11 2013 (The Conway Bulletin) — When Kazakh President Nursultan Nazarbayev announced the Kashagan oil field discovery in 2000 he described a future for Kazakhstan as one of the great oil producing nations.
Exploiting Kasahagan, he said, would mean Kazakhstan becoming one of the top five oil exporters in the world.
Now, after a decade of delays and a five-fold rise in the cost of the project to $50b because of complex technical problems and squabbling between the partners, Kashagan has finally delivered its first oil.
But that doesn’t mean Kazakhstan has now propelled itself into the Premier League of global oil exporters.
Kashagan may have estimated recoverable reserves of 13b barrels of oil and be touted as the largest oil find in 30 years but production, initially at least, will be modest before rising to 350,000 barrels per day.
This will rise to a mightier 1.5m barrels per day but it is still down on the 3m that was touted at first.
Even so, despite the problems, Kashagan will shape oil production in Kazakhstan for years.
The consortium developing Kashagan is made up of ENI, Shell, Total, ExxonMobil, Kazmunaigas (all owning 16.8% stakes), CNPC (8.4%) and Inpex (7.6%).
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(News report from Issue No. 152, published on Sept. 18 2013)
SEPT. 13 2013 (The Conway Bulletin) — Azerbaijan’s government has been talking up efforts to boost its non-oil sector, but energy exports have still accounted for 95% of the value of all its exports so far this year, media quoted Azerbaijan’s Central Bank as saying. Analysts have said Azerbaijan needs to diversify its economy.
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(News report from Issue No. 152, published on Sept. 18 2013)
SEPT. 7 2013 (The Conway Bulletin) — On a tour of Central Asia, Chinese President Xi Jinping met with Kazakh President Nursultan Nazarbayev in Astana. Alongside other deals, they finalised a deal for China to buy an 8.33% stake in Kashagan, a Caspian Sea oil project, for $5b. China beat India for the stake in Kazakhstan’s biggest energy project.
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(News report from Issue No. 151, published on Sept. 11 2013)
SEPT. 4 2013 (The Conway Bulletin) — During a trip by Afghan officials to Baku, the Azerbaijani energy minister, Natik Aliyev, said that Azerbaijan may help build a series of small oil refineries in Afghanistan. Azerbaijan officials have been talking up the prospect of investing more heavily in Afghanistan’s energy sector.
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(News report from Issue No. 151, published on Sept. 11 2013)
SEPT. 10 2013 (The Conway Bulletin) –Just as first oil from the giant Kashagan field in Kazakhstan’s sector of the Caspian Sea draws tantalisingly close, a partner in one of its main export routes has warned of a delay to planned capacity expansion.
In an interview with Reuters, Mikhail Barkov, vice-president at Russian pipeline monopoly Transneft, said work to expand the Caspian Pipeline Consortium (CPC) pipeline that runs from Atyrau in west Kazakhstan to the Russian Black Sea port of Novorossiik had been delayed by 6-12 months.
He didn’t give any reason for the delay.
Transneft is the largest shareholder in CPC, followed by Kazmunaigas and US oil major Chevron. There are several other smaller shareholders. The pipeline started operations in 2001 and has been an important export route for Kazakh oil, mainly from the Chevron-led Tengizchevroil project.
The plan had been to roughly double the capacity of CPC to about 1.3m barrels of oil a day by 2015, partly to cope with extra supplies from the Kashagan oil field.
News of the CPC delay is likely to frustrate Kazakh oil exporters, particularly as they were set to soon celebrate the first oil from Kashagan after years of delays and cost overruns.
On Sept. 7, Sauat Mynbayev, head of Kazmunaigas, said that Kashagan would start production within a month.
An expanded CPC has been touted as one of the primary export routes for oil from Kashagan. The expansion delay is likely to push oil from Kashagan — operated by a consortium of ENI, ExxonMobil, Total, Kazmunaigas, Shell, Inpex and now China’s CNPC — onto other export routes wholly owned by Russia.
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(News report from Issue No. 151, published on Sept. 11 2013)
AUG. 30 2013 (The Conway Bulletin) — The CEO of French energy company Total, Christophe de Margerie, said that Kashagan, the Caspian Sea oil field that Kazakhstan has pinned its economic hopes to, will begin production shortly, Bloomberg News reported. Total is one of the Kashagan shareholders. Production at Kashagan is several years overdue
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(News report from Issue No. 150, published on Sept. 2 2013)
AUG. 29 2013 (The Conway Bulletin) — After several months of deliberation, the Kazakh government signed into law a new energy saving code that should turn the country into a beacon of green, power-saving efficiency in the former Soviet Union.
For foreign investors and business, the code — dubbed Energy Efficiency 2020 — is something of a quandary. It will create opportunities for some businesses but also additional cost for industry.
Kazakh President Nursultan Nazarbayev decreed that by 2015, the country needed to reduce its power consumption by 10%. Energy Efficiency 2020 aims to cut this by 25%.
Mr Nazarbayev’s motivation for this decision may have been EXPO-2017, a global opportunity to showcase his gleaming capital, Astana. Part of the EXPO-2017 message is clean, efficient energy.
In any case, the ramifications will mainly be felt by large industry. Kazakh media reported that under the new code it will process energy audits of 2,000 industrial sites.
Those businesses that don’t pass the audit will have to buy and implement a series of energy saving technologies and techniques.
Another part of Kazakhstan’s society that will be heavily targeted to improve energy efficiency is insulation in Soviet-era housing. This is often leaky, spilling out much of the heat generated by the centrally-controlled system.
It is unclear who will foot the bill for this ambitious target, but the government said it has already allocated $7.1b for various energy saving projects.
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(News report from Issue No. 150, published on Sept. 2 2013)
AUG. 19 2013 (The Conway Bulletin) — Azerbaijan’s state oil company SOCAR wants to buy 5m tonnes of oil from Russia’s Rosneft, media quoted SOCAR chairman Rovnag Abdullayev as saying. The plan is to reverse the flow of the Baku-Novorossiysk pipeline to pump the oil to Azerbaijan where it will either be refined or exported to Europe.
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(News report from Issue No. 149, published on Aug. 26 2013)