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printKashagan oil project - Kazakhstan location
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Elena Gerebizza, CRBM, Italy working partners
Kate Watters, Crude Accountability, United States ![]() Ongoing work at Kashagan oil field
sector
oil and gas
description
An offshore oil project in the north Caspian Sea, Kashagan is part of the North Caspian Sea Production Sharing Agreement (PSA), a 40-year contract that was signed in 1997 and includes the development of 11 offshore blocks. Kashagan is estimated to hold 13 billion recoverable barrels of crude, making it the largest new oil found worldwide in over a decade.
Phase I of Kashagan’s development has been extended twice, and current reports put the end of Phase I and the beginning of commercialization anywhere from 2008 to 2011. Construction costs have spiraled from $27 billion to $60 billion in 2006. In July 2007, the latest projection made by the consortium was $136 billion. In addition to the offshore extraction itself, a number of supporting infrastructure projects throughout western Kazakhstan and the Caspian Sea, pose great environmental and social risks. These projects include the development of the Bautino Supply Base north of Aktau, the Koshanai Cuttings, Oily water treatment Facility (near Bautino) the construction of the Bolashak Onshore Processing Facility (commonly called the Karabatan Refinery, the largest processing area ever planned) near Atyrau, oil pipeline construction and extension projects, and a future trans-Caspian transportation system linking Kashagan to BP’s Baku-Tbilisi-Ceyhan pipeline. Kashagan and its supporting infrastructure projects combine a dangerous mix of new untested technologies, a fragile environment, a multinational oil consortium operating under a confidential agreement with the government of Kazakhstan and the prospect of financing by the world’s largest international finance institutions. current status (Aug 16, 2010)
In July 2010, KazMunaiGas announced that the second phase of development of the Kashagan oil field has been postponed until 2018-2019. The delay would also affect the start of the Kazakh Caspian Transport System (KCTS), designed to carry Kazakh oil across the Caspian to Azerbaijan and on to foreign markets. On November 5, 2009 Italy's Eni group and Kazakhstan's London-listed KazMunaiGas signed a preliminary agreement that could result in up to $50bn of investments in Kazachstan's upstream and downstream oil and gas sectors. This memorandum of understanding signed in Rome reflects Eni's growing ambitions in the region and Kazakhstan's intention to move away from being just an exporter of raw materials and to lessen its dependence on Russia. The four-part agreement includes construction of a gas sweetening plant in Kazakhstan. The MOU also foresees upgrading Kazakhstan's Soviet-era Pavlodar refinery, construction of a shipyard on the Caspian, and joint Eni-KazMunaiGas exploration of the Isatay and Shagala oil blocks in the Caspian. brief history
On 24 January 2007, a Memorandum of Understanding was signed by the
participant companies in the Agip KCO consortium, those in the
TengizChevroil consortium and KazMunaiGaz to create an estimated $3
billion trans-Caspian oil transport system. companies involved
companies
Agip KCO, a company fully owned by Eni S.p.A., operates on behalf of a consortium comprised of the following major oil companies:
Shares in the project after the January 13th, 2008 agreement:
dodgy aspects
social impact
Kashagan not only threatens the environment, it also threatens the livelihoods of millions of residents of the Caspian region. Oil development in the north Caspian places the tourism and fishing industries at risk and prevents investment in other economic ventures that could contribute to the sustainability of the region. environment
The Kashagan oil field is located within a protected territory—the shallow nature reserve zone of the north Caspian Sea. Most notably, the endangered sturgeon migrate through this area to their spawning grounds, the endangered Caspian Seal’s whelping grounds are found here, and numerous bird species migrate through this area. Finally, there has been little to no project information made available to the public despite repeated requests from local activists, and the public was not involved in the development of the project’s Environmental Impact Assessment. financial institutions involved
banks
Bank of Tokyo Mitsubishi UFJ
- profile
BNP Paribas
- profile
Citigroup
- profile
DZ Bank
HSH Norbank
ING Group
- profile
Mizuho
- profile
Natixis
- profile
Société Générale
- profile
Sumitomo Mitsui Banking Corporation
- profile
multilateral development banks
export credit agencies
development banks (national and IFI's)
Japan’s JBIC provided financing for Phase 1, including a $649 million loan to INPEX North Caspian Sea co-financed by Japanese private banks (Mitsui, Mitsubishi and Mizuho) in November 2005. Kazakh state energy firm KazMunaiGas repaid the US$1 billion loan provided by BNP Paribas, Societe Generale, and Citibank NA Bahrain in September 2007 for the development of the Kashagan field ahead of time (October 2008) (International Herald Tribune). |
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