The Kashagan oil field has started commercial output, Kazakhstan's energy minister said on Nov. 21, marking a milestone for $55 billion project which is more than a decade behind its original production plan.
The field in the Caspian Sea has produced about 0.5 million tonnes, or 3.8 million barrels (MMbbl) of oil since test pumping began on Sept. 28, Kanat Bozumbayev told Parliament, and daily output has exceeded 75 Mbbl since Nov. 1.
Kashagan has recoverable oil reserves estimated between 9 Bbbl and 13 Bbbl, and is one of the world's biggest discoveries in the last 40 years, according to the Kazakh oil ministry.
The former Soviet republic expects Kashagan to produce up to 1.1 million tonnes of oil this year and 4 million tonnes to 8 million tonnes in 2017, helping to offset declines at mature fields in the country.
Discovered in 2000, the field was named after a 19th century Kazakh poet, Kashagan Kurzhimanuly. With its production difficulties, the field has lived up to its name, which means "restive, uncontrollable."
Production, originally due to begin in 2005, did not start until 2013 and then was halted shortly afterward due to technical problems with gas pipelines.
Costs have also ballooned. The initial estimate was $57 billion for the project's 40-year lifetime, but it has already cost about $55 billion to develop, according to analysts' estimates.
The NCOC consortium developing Kashagan comprises China National Petroleum Corp., ExxonMobil Corp. (NYSE: XOM), Eni, Royal Dutch Shell Plc (NYSE: RDS.A), Total, Inpex and KazMunaiGas.
The field is set to ramp up output further during 2017 thanks to reinjection of sour gas into its reservoir, which will increase production to more than 150 Mbbl/d in 2017 and 230 Mbbl/d in 2018. Kazakhstan's total production for 2016 is forecast at about 1.6 MMbbl/d.
Kazakhstan, whose economy is dominated by oil, is keen to push up production, but further expansion may be delayed if oil prices remain low, some analysts have said.
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