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Will Kazakhstan lead an oil boom in Asia? - CSMonitor.com

Will Kazakhstan lead an oil boom in Asia?

Even with Kazakhstan's giant Kashagan oil field down, the prospects look up for oil and gas in the
Central Asian country, Graeber writes.
By Daniel J. Graeber, Guest blogger / January 28, 2014

A general view show s the Bolashak

oil plant on the Kashagan offshore oil
field near Atyrau in Kazakhstan.
Leon Neal/Reuters/File

Enlarge

A consortium in Kazakhstan led by U.S. supermajor Chevron said it set a production

record in the country's western Tengiz oil field and last week, China said it was piping in
more oil from Kazakhstan than ever before. Even with its giant Kashagan field down, the
prospects look up for the Central Asian country.
Tengizchevroil, a joint venture between Chevron,
OilPrice.com
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Exxon Mobil, state-owned KazMunayGas and

Russia's LukArco, said production from the
onshore Tengiz oil field in western Kazakhstan
increased nearly 12 percent from 2012 levels to
an annual 177 million barrels last year.
Tim Miller, director-general of the consortium

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known also as TCO, said Monday from Astana,

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the nation's capital, oil production from Tengiz

would help Kazakhstan reach its 2020
production target of at least 733 million barrels.
Chevron describes Tengiz as a "super giant"
and the field alone accounts for nearly 30 percent
of the country's total production. (Related
article: Kashagan, Down but not Out)
The Organization of Petroleum Exporting
Countries said in its market report for January
that Kazakhstan carried its own against the

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the former Soviet Union. Russian, meanwhile, will

shift further away from the European Union by
sending its crude oil to China through the Kazakh
transit network during the first quarter of 2014.
OPEC said Kazakhstans oil supply increased

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1/31/2014

Will Kazakhstan lead an oil boom in Asia? - CSMonitor.com

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by notably from the previous year to average

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On the consumer end, Chinese government data

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week, Beijing said oil sent through the 745-mile

China-Kazakhstan pipeline hit a record at 86
million barrels in 2013. That's 14 percent higher
year-on-year, reflecting China's efforts to

diversify its crude oil import options.

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For investors, that shift from Beijing reflects an overall realignment of energy market
centers to Asia. TCO said its $7.4 billion expansion project for Tengiz should help field
production increase steadily throughout the course of the decade.
Chevron is also assisting KazMunayGas with developments at the Karachaganak oil field
in Kazakhstan, which last year averaged 213,000 bpd, making it one of the largest oil
fields in the world. A $5.4 billion project outlined in 2010 calls for the expansion of a 900mile Caspian oil pipeline to 1.4 million bpd from its current capacity of 730,000 bpd for a
Black Sea coast terminal.
The biggest of Kazakhstan's super giants, Kashagan, remains offline. OPEC said last
year was supposed to be Kazkhstan's breakout year, but pipeline issues at the 13 billion
barrel field kept it out of a limelight stolen when Azerbaijan made transit decisions for its
Shah Deniz gas field in the Caspian Sea. All told, production from Kashagan was online
for less than two months last year. The North Caspian Operating Co., the consortium
managing the field, said the date of restart depends on the extent of the necessary
repairs. When it does return, as much as 1.5 million bpd could come from the project,
leaving Azerbaijan and possibly the best U.S. shale has to offer in its wake.
Original article: http://oilprice.com/Energy/Energy-General/Kazakhstan-Could-LeaveU.S.-Shale-in-the-Dust.html
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