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Kazakhstan’s Kashagan costs blowout
Eni Expects to Resume Talks On Kashagan By This Month
Reuters via Moscow Times
..Kazakhstan has said it wants a bigger share of revenues from the world’s biggest oil-field discovery in 30 years in compensation for delays in pumping the first oil from the Caspian Sea wells and threatened to strip Eni of its role as project operator.
“We are getting ready for challenging, but serene talks,” Scaroni told reporters on the sidelines of a conference in the Italian holiday resort of Cortina d’Ampezzo. “Our relations with the Kazakh authorities are and have always been excellent and we do not have particular worries.”
Scaroni said the talks with the Kazakh government were delayed by parliamentary elections in the country and that he would go there before the end of August. He reiterated that Eni was ready to resolve all problems.
Kashagan’s start-up has been delayed from an original target of 2005 to the second half of 2010. The Kazakh government says projected costs over its 40-year life have increased to $136 billion from $57 billion.
Eni has not commented on the lifetime costs but has said that just the first phase costs have doubled to $19 billion.
(20 Aug 2007)
Kazakhstans Prime Minister Karim Masimov had some hard words a few weeks ago:
‘When the costs increase by 5 pct, by 10 pct, that’s one thing,’ Masimov said in the interview. ‘But when they rise by 2 1/2 times, either the planning was wrong, or the execution is wrong, or it was deliberate.’
Sacked Iran minister warns of energy ‘catastrophe’
AFP
Iran’s sacked oil minister has issued a parting warning to President Mahmoud Ahmadinejad, predicting a looming “catastrophe” in the Iranian energy sector because of high consumption, media reported Sunday.
…Iran is OPEC’s number two crude oil producer and is also pinning major hopes on its gas reserves, estimated to be the second largest proven reserves in the world after Russia.
But frenzied consumption of petrol forces it to import millions of litres per day of refined oil to make up for a domestic shortfall. Wasteful heating methods also create gas shortages in winter.
(19 August 2007)
Esso reckons 20 more years of oil left in Bass Strait
Barry Fitzgerald, Sydney morning Herald
SUCCESS in life extension work by Bass Strait operator Esso has prompted the ExxonMobil subsidiary to predict that the region still has more than 20 years left of oil production and more than 30 years of gas.
A $400 million seismic data and infill drilling program, involving wells at the Kingfish, Bream, Halibut and Fortescue fields, is adding 30,000 barrels of crude oil to daily production, worth close to $1 billion a year on current prices.
But Esso’s success has implications for the planned $5 billion Monash Energy coal-to-liquids project in the Latrobe Valley, a joint venture between Shell and Anglo American. ..
But success in the Esso infill program suggests that the implementation of CCS in Bass Strait could be further off than first thought, given the intention of draft legislation that existing oil and gas production not be affected by licences issued for CCS. ..
Meanwhile, the crude oil boost for the Bass Strait partnership of Esso and BHP Billiton means that the natural decline curve for production has flattened, allowing the Esso-managed fields to average total liquids production (oil, condensate and liquefied petroleum gas) of 127,000 barrels a day in 2006.
While that is well short of the 500,000 barrels a day achieved in Bass Strait’s heyday, it still ranks the area among Australia’s biggest producers after 38 years of production in which 3.5 billion barrels of oil and 5 trillion cubic feet of gas have been produced. ..
(30 July 2007)
