ConocoPhillips
approves Kashagan development plan
Posted: 25 February 2004
ConocoPhillips, in association with its co-venturers in the North
Caspian Sea Production Sharing Consortium, and Kazmunaygaz (KMG),
the petroleum authority of the Republic of Kazakhstan, announce
approval of the development plan for the Kashagan oil field.
"We are excited about the potential of this world-class project
and are pleased with the path forward outlined in the development
plan," said Bill Berry, ConocoPhillips executive vice president
of Exploration & Production. "Last year, we exercised our
pre-emptive rights on British Gas' pending interest disposition,
bringing our ownership interest in the project to 10.19 percent
once the pre-emptions are approved. This fits our strategy of improving
our upstream portfolio through several avenues, including gaining
access to giant discovered reserves that are not yet developed."
With production estimates of up to 13 billion barrels of oil, the
Kashagan field is one of the largest discoveries in the last 30
years. Initial production from the field is currently targeted at
75,000 barrels of oil per day in 2008. Subsequent phases will bring
production to a level currently estimated at 1.2 million barrels
of oil per day. To enhance oil recovery and to reduce sulphur handling,
the plan includes injection of raw gas back into the reservoir.
This will be accomplished by construction of facilities for onshore
gas processing and offshore raw gas injection. The capital investment
for full field development is currently estimated at approximately
$29 billion, with the first phase expected to amount to about $10
billion.
The sanctioned project involves significant technical and technological
challenges, including some associated with the harsh climatic conditions.
Instrumental in gaining approval of the development plan was a careful
and thorough analysis of how best to preserve the delicate ecological
environment.
The Kashagan project will positively impact the Kazakh national
economy in terms of major opportunities and benefits through export
revenues and the employment of Kazakhstan firms and manpower. Additionally,
investment in the training of Kazakh employees and executives for
the project should support the growth of the Kazakh petroleum industry.
The field will be operated by Agip KCO on behalf of the companies
forming the North Caspian Sea Production Sharing Consortium (interests
before pre-emption): Agip Caspian Sea B.V., 16.67 per cent; British
Gas, 16.67 per cent; ExxonMobil, 16.67 percent; Shell, 16.67 per
cent; Total, 16.67 percent; ConocoPhillips, 8.33 per cent; and Inpex,
8.33 per cent.
ConocoPhillips is an integrated petroleum company with interests
around the world. Headquartered in Houston, the company had approximately
39,000 employees, $82.5 billion of assets, and $105 billion of revenues
as of Dec. 31, 2003.
For more information see www.conocophillips.com.
Posted by Richard Price,
Editor Pipeline Magazine
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