KASHAGAN OIL PRODUCTION: 470 TBD

PLATTS - Oil production at Kazakhstan's giant Kashagan field could be as high as 470,000 b/d under its first development phase, the head of the consortium overseeing the field, Brune Jardin, has said, while also noting plans for a big maintenance shutdown, and for development of nearby fields with China's CMOC.

In a speech delivered Tuesday in the Kazakh city of Atyrau, a copy of which was seen by S&P Global Platts, Jardin, who is managing director of North Caspian Operating Company, outlined plans to raise production beyond the official target for phase 1 of 370,000 b/d, without entering a formal second phase of development.

He did not specify a timeline, but said NCOC was "dedicated" to reaching the official phase 1 capacity of 370,000 b/d "as early as possible" and keeping a "pipeline of projects" full.

He said Kashagan was now demonstrating its reliability, following the delayed start of production in 2016, and had reached monthly production levels of 1 million mt (roughly 250,000 b/d) in four months of this year. Recent reports have suggested production has at times reached well over 300,000 b/d.

"NCOC has an opportunity to increase the capital effectiveness of the assets in which we have already invested with next steps that could take us beyond 370,000 b/d," he said. "These include upgrading the raw gas injection compressors located offshore to increase production by an additional 20,000-25,000 b/d; adding raw gas injection compression capacity offshore on an existing or new island, de-bottlenecking our offshore and onshore facilities, additional drilling, and additional pipelines between facilities."

"All these improvements could potentially add up to another 100,000 b/d or more of capacity," he said.

On next year's planned shutdown he said this would span the onshore Bolashak processing center and the main artificial island in the Caspian Sea built for Kashagan production: D-Island.

"This will be a complete shutdown of our operations to conduct technical inspection and scheduled maintenance of equipment. It will be the first time... that we will conduct such a large-scale operations, involving thousands of contractors. The whole NCOC organization is now preparing for this event to make it a success," he said.

Jardin also noted plans for a combined development of two fields in the vicinity, Kalamkas, and CMOC's Khazar, saying "early engineering" had begun and a development plan would be submitted to the authorities next year.

The combined recoverable reserves at the two fields are 500 million barrels of oil, and 9 Bcm, or 300 Bcf, of gas, he said.

"This cooperative development maximizes synergies and contributes to the economic viability of both the Kalamkas and Khazar projects," he said.

----

Earlier:

2018, July, 6, 11:25:00 KASHAGAN'S OIL 300 TBD IMF - Germany’s economic performance was strong in 2017, underpinned by solid domestic demand and a rebound in exports in the second half of the year. Despite a slowdown in public consumption due to the stabilization of refugee-related expenditures, real GDP grew by 2.5 percent.

2017, March, 6, 18:45:00 KASHAGAN'S OIL EXPORTS Kazakhstan has for the first time shipped Kashagan crude in the form of Siberian Light blend from the Russian port of Novorossiisk, the Kazakh state pipeline company has said, amid a surge in Siberian Light exports.

2016, October, 14, 18:30:00 THE FIRST KASHAGAN'S OIL The project has been plagued by multiple delays and cost overruns. A 2008 budget estimate of $38 billion jumped to $53 billion by the end of last year as the partners replaced undersea links after sour gas cracked the pipes.

2016, June, 16, 17:50:00 KASHAGAN: I'LL BE BACK The Kashagan oilfield development project has been marred by delays and cost overruns. It first began producing in September 2013 but was halted two weeks later due to gas leaks.

2016, April, 24, 12:35:00 KASHAGAN WILL RELAUNCH Kazakhstan's KazMunaiGaz, which owns the largest stake in the project, has said previously that the field would relaunch by the end of 2016.

2015, November, 5, 19:05:00 KASHAGAN WILL RESTART Kazakhstan's vast Kashagan oil field, the world's biggest oil find in decades, is expected to restart production at the end of 2016, Exxon Mobil Production Vice President John Chaplin said.

2014, October, 11, 19:05:00 KASHAGAN: RISE $4 BLN The cost of Kashagan, already the world’s most expensive oil project, is set to rise by nearly $4bn as the companies developing it are forced to replace 200km of leaking pipelines.