Kashagan may start in September

Altynay IbraimovaSeptember 09, 2016

Today, during an expanded meeting of the Government of the Republic of Kazakhstan under the chairmanship of the President Nursultan Nazarbayev, Sauat Mynbayev, the Chairman of the Board of NC KMG announced possible start of oil production at Kashagan at the end of this month. 

According to the Interfax-Kazakhstan which quoted Chairman of the Board of NC KMG Sauat Mynbayev, oil production at Kashagan may begin on September 24 this year, the start of commercial production is planned for mid-November. According to Reuters, output will initially be 75 ths bpd in October, rising to between 150 ths and 180 ths in the November-December period of this year.

Earlier, on September 5, President of Kazakhstan, during his visit to China, spoke about plans to increase oil exports to China almost 3 times "due to the re-commissioning of the Kashagan oil field operations".

This June the Ministry of Energy announced signing of the agreement between the participants of the project (KMG, Eni, ExxonMobil, Shell, Total, Inpex and CNPC) on the procedure of oil, gas and sulfur extraction at Kashagan. The signing of the document is one of the key conditions, the implementation of which is required for the commencement of commercial production at Kashagan.

Our view

We view the news as neutral because the expected start date of Kashagan project has not changed significantly. Earlier, the start of oil production at Kashagan was expected in October this year. Prior to that, the Minister of National Economy Erbolat Dosayev was planning that production at Kashagan will resume in December.

A positive aspect remains immutability in plans to launch the project in the current year, given its scale.