Kashagan Offshore Oil Field Project, Kazakhstan

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Key Data

Discovered in July 2000 !ashagan has been described as the largest field found in the past "0 years the largest outside of the Middle #ast with a pro$ected output close to that of the %hawar field in Saudi &rabia' (he field is being developed by a group of partners including Shell )16'*1+, #--on Mobil )16'*1+, (otal )16'*1+, .hina /ational 0etroleum .orp )./0.1*'""+ which was ac2uired from .onoco0hillips for 34bn in 201", !a5akh state1run oil company !a5Munai%as )16'*1+, 6/0#7 )8'46+, and &gip!.9 )#ni, )16'*1+,' #ni is responsible for phase 6 of the field:s development while Shell is responsible for production operations'

(he pro$ect however suffered several delays and costs increased from 348bn to 31*8bn' (he cost estimate for phase 6 was increased to 3;6bn in January 2012 from the original estimate of 32;bn' & new $oint operating company /orth .aspian 9perating .ompany )/.9., became the operator of the field' 6n January 2010 /.9. announced the budget allocated for the development of the !ashagan field had been reduced to 38bn from the earlier 310bn' /.9. spent 3;0bn in developing the field up to 201"' 6n &ugust 2010 !a5Munai%as announced that the phase 66 development of the field would be delayed until 201*11<' 6n =ebruary 2012 a 3;4bn funding was approved by !a5akhstan under the windfall oil fund to develop the field' (he funds will be handed over between 201" and 2014'

Kashagan oil field production and gas leakages

=irst production from the field was achieved in September 201"' (he production had to be however halted for few weeks as gas leaks were detected from a pipeline connecting the field to the onshore processing facility' /.9. is currently investigating the cause of the leaks' (he consortium e-pects to produce 1*0 000bpd of oil from !ashagan by the end of 201" which will rise up to "80 000bpd upon completion of the second phase'

Kashagan field, Kashagan East 1 and West 1 geology

>& new $oint operating company /orth .aspian 9perating .ompany )/.9., became the operator of the field'> !ashagan is a carbonate platform of the ?ate Devonian to middle .arboniferous age' (he reef is about 84km long and "4km across with a narrow neck $oining two broader platforms )!ashagan #ast and !ashagan @est,' (he top of the reservoir is ;'4km below sea level and the oil column e-tends for more than one kilometre' (he seal is middle 0ermian shale and late 0ermian salt' (he reservoir consists of limestone with low porosities and permeability' (he oil is light with ;4A &06 gravity with a high gas1oil ratio and very high B2S content of 1<+' (he field is heavily overpressured which presented a significant drilling challenge' (he figures for oil in place range between "0 billion and 40 billion barrels with a common publicly 2uoted figure of "* billion barrels but because of the reservoir:s comple-ity the recovery factor is relatively low about 14124+'

(he .aspian Sea is "0m below sea level' Most of its mean water depth is 20*m although the north1east area is considerably shallower' (he field 84km SS# of &tyrau lies in $ust "'8m of water' (emperatures can fall below 120A. in winter and a coating of ice several metres thick forms in this part of the .aspian Sea for many months'

Discovery of the Kashagan ells

Discovery well !ashagan #ast 1 was a single vertical well that was drilled in 2000 to a total depth of 4 200m' During tests the well flowed at a rate of 600mC of oil a day and 200 000mC of gas a day on a "2 D 6;in choke' !ashagan @est 1 was the second discovery well' Discovered in 2001 tests showed that the well flowed at a rate of " ;00bopd while the oil gravity measured between ;2A and ;4A &06' !ashagan #ast 2 was discovered in late 2001 and was drilled to a depth of ; 1;2m and flowed at a rate of 8 ;00 bopd' Dresser Services was awarded the integrated drilling contract' Eecause of the environmental conditions icebreaking supply boats were used' Most icebreakers work by using the weight of the ship to crack the ice but this does not work in the shallow waters of the .aspian so shallow1draught &rcticaborg icebreakers from =inland:s !vaerner Masa shipyards were brought in to break the ice using specially designed propellers' Special tugs were also designed to work in these waters and arrived in the .aspian in September 2002'

!ce"reaker tugs "uilt "y #$% &or ay Offshore

JS. .ircle Marine 6nvest:s subsidiary .aspian 9ffshore .onstruction operates two icebreaker tugs at the !ashagan field' (he tugs were built by S(7 /orway 9ffshore under an /kr;40m contract awarded by JS.' (he vessels which were designed under ice1class notification 1& Super are 64m long and have a beam of 16';m' (he tugs feature fire1fighting e2uipment rescue operations facilities and towing e2uipment in shallow waters'

Develop'ent of the Kashagan field in Kazakhstan

(he development plan for the 31"6bn pro$ect approved in =ebruary 200; foresees production developing in three phases for proven reserves of about 1" billion barrels'

>#ni is responsible for phase 6 of the field:s development while Shell is responsible for production operations'> (he field initially produced 60 000bpd and is e-pected to produce 1'4 million barrels per day by 2021 which is 1 slightly more than !a5akhstan:s total current production' (he pro$ect design includes building production hubs on platforms and artificial islands to collect production' 9il and any gas that is not re1in$ected is treated at the hubs before sending in separate pipelines to new onshore treatment plans at Eolashak' Bere the oil is further stabilised and purified while the gas drawn for the removal of sulphuric acid is used partly as fuel to supply the energy necessary for the production plants and partly marketed' (he field will feature a total of ;0 wells' &s of 201" 20 production wells were operational'

#unkar floating production vessel

(he drilling programme at the &strakhan yard in the Fussian =ederation is being carried out by the Sunkar floating production vessel' (his converted swamp barge was re1designed and modified specifically for .aspian service in a 3100m engineering e-ercise which included the installation of two four metre high steel deflector tanks to protect the rig from the ice' (he barge measures *4-4"m and is 4'4m high and is the largest of its type' 6t weighs 6 000t and can hold up to 100 people' 6n order to minimise supply operations the platform design re2uired storage1tank volumes that were as large as possible' (he tanks include 1< ballast tanks )1* *6<mC, five drill water tanks )1 *4;mC, five fuel oil tanks )1 "6;mC, one pollution tank )416mC, four potable water tanks )41"mC, one base oil tank for mud )"*4mC, and one brine tank )22;mC,'

#upport facilities and Kashagan field contracts

Support facilities include a bacterial sewage unit capable of handling <'4mC and two electrically driven &lfa ?aval freshwater distillers consisting of two units each capable of ""mC a day' .ommunication is maintained by radio and a satellite voice1and1data link and there is a 1<-1<m helicopter deck' 0ower is provided by four 1 400k@ power generators and one

*60k@ standby generator' #mergency power is available through a ;20k@ diesel1driven generator' (he rig barge sits on submerged limestone berms that stand less than one metre high' (he berm is surrounded by 2; ice1resistant piles each weighing 80t' @ith a diameter of 1'6m and a height of "0m the berms are used to break up ice sheets and reduce forces on the barge' 6n 9ctober 200* &gip!.9 handed a 3"1m letter of intent for front1end engineering and design work on phase 66 of the development to a $oint venture of &ker Solutions @orley0arsons and .EG6' &t the time &ker Solutions and @orley0arsons were already engaged in e-ecuting phase 6 of the pro$ect carrying out engineering services fabrication and hook1up' 6n &pril 2010 however the &ker and Saipem $oint venture was awarded an updated contract for carrying out =##D studies for phase 66' (he new contract worth 32<"m replaced the one awarded in 200*' 6n May 200< &ker and Saipem were awarded a 32'6bn contract for the installation and commissioning of pipeline and offshore production facilities of phase 6' (he scope of work for Saipem includes oil and gas production from artificial island facilities 6sland Elock & and 6sland Elock D' 6nstallation works were completed in201"' 6n 9ctober 2010 Synectics 6ndustrial Systems was awarded with a contract to provide 60 networked ..(H system for the pro$ect' (he scope of the contract included installation of more than "00 .9#7 camera stations and integrating the communication system with (hales carrier1grade multi1service communication subsystem' 6M0a. was awarded a 3800m contract to provide overall stability and detailed design and construction supervision services for the entire rig at the field'