04-10-02 The enormous Kashagan oilfield offshore Kazakhstan in the northern Caspian Sea is presenting its developers tremendous difficulty in determining how to produce its vast reservoir of oil. Domenico Spada, managing director of the ENI Agip-operated field, said at the annual Kazakh petroleum conference in Almaty that the question is how to proceed in the development of the field, and that the participants in the consortium have differing approaches to the development but are working to find the best solution.
The 13 bn barrel reservoir of the Kashagan Field -- the largest discovered in more than a quarter-century -- lies at a depth of 13,000 to 16,500 ft (4,000 to 5,000 meters) and presents its developers with several challenges that must be overcome, including the presence of a vast amount of poisonous hydrogen sulphide gas (mercaptans) under extremely high pressure, something also found in the nearby onshore Tengiz Field, which cost ChevronTexaco millions of dollars in development costs to remedybut is likely to be even more difficult in the environmentally sensitive Caspian Sea.

Spada said the challenges of Kashagan are numerous, more than just the poisonous gas. The field is located in an area of very shallow waters that freeze in winter, he said, for example. "We have to operate in very difficult conditions, which are sometimes more difficult than in the Arctic, because the ice moves rapidly."
And, he said, there is the question of getting equipment into the Caspian to develop and produce the field's oil and of how to get the oil out of the Caspian and to market once production commences.

Kazakhstan wants the Kashagan Field to go on production in 2005 and to be ramped up to 1 mm bpd by 2015, but Spada could not say with assurance that the consortium could meet that date, only that the first phase of the development is expected to be approved by the end of the year and that it will cost billions.
Work is on schedule, he said, but much remains to be done just to prepare for development, including the construction of a number of artificial islands on which to work and a gas processing and storage complex from which gas will be reinjected into the reservoir to offset some of the natural pressure, as well as a storage facility for the large amount of sulphur that will be produced.

ENI Agip is the operator of the Agip Kazakhstan North Caspian Operating Company. It, BG, ExxonMobil, Shell, and TotalFinaElf each hold 16.67 % interest. ConocoPhillips and Inpex hold 8.33 % each.