For a long time the Kashagan oil and gas field was a pride and hope of Kazakhstan. It was named a “super giant and super perspective” field, which promised super profits to the country. The country developed its future plans and economic projects and made up state budget considering revenues from this field.
Owing to production from this field, Kazakhstan planned to be the top world oil maker.
However, year after year the project gives less and less reasons for optimism. Kazakhstan, which planned to receive first oil from the Kashagan field in the mid 2000s, has been still waiting.
After a long awaiting commencement of extraction on the field in September 2013 and cracking of the pipelines, Kashagan has been standing idle for several years.
Kazakhstan’s officials said that it is planned to resume extraction on the field at the end of 2016 – early 2017. Kazakhstan Premier Karim Masimov mentioned the same date at the recent joint session of the Chambers of parliament.
However, the statement did not sound as confidently, as several years ago. It seems like that several delays of extraction on the field in the past ten years have seriously shaken faith of regular citizens and high-ranking officials in it.
At present the word “super” as applied to the project is used in combination with the word “expensive.” In the CNN Money rating, Kashagan is called the most expensive energy project in the world.
However, in the rating the cost of Kashagan was estimated at $116 billion, but it has increased by several more billions. And the project costs keep on growing.
Kazakhstan Senior Vice Minister of Energy Uzakbai Karabalin said that cost of full replacement of about 200 km of pipes on the Kashagan field will be about $3 billion.
But are there any guarantees that Kashagan will not need additional investments and will bring more profit after replacement of the pipes? For almost 20 years the most experienced energy companies of the world have been working on the field. But even this has not saved the project from fatal mistakes, errors and miscalculations. Are there any guarantees that the mistakes will be corrected at last?
More and more expects share the opinion that even if the Kashagan project starts working, it will not bring profit to Kazakhstan and the companies developing it and it will not justify capital invested into it, especially now when the oil prices are far from their maximum.
The accident on the field could lead to the ecological problems and Kazakhstan will have to pay for them to its Caspian neighbors for decades. The Kashagan reminds more of a luggage without a handle – it is hard to carry it and it is impossible to throw it away.
