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Kashagan Inches Closer to Production

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Kashagan, one of the world’s most important field developments, is one step closer to commencing production. The developer of the project, the North Caspian Operating Company, said Wednesday that it had introduced gas to one of its artificial islands and its flare was lit, Reuters reported.

"This achievement brings the project a step closer to the start of production later this year," the consortium said in a statement.

The Kashagan field has undergone several setbacks since its inception. Most recently, Kazakhstan’s government said Tuesday it will exercise its right to buy an 8.4 percent stake in the project to develop the field from ConocoPhillips.

“Officially notified ConocoPhillips that it is exercising its right under the Subsoil Law of Kazakhstan to pre-empt ConocoPhillips’ proposed sale of its … interest in the North Caspian Sea Production Sharing Agreement,” the ministry of oil and gas said in a statement.

Kazakh state energy company, KazMunaiGaz, will acquire the stake.

Estimated to hold 38 billion barrels of oil-in-place, Kashagan is located in the North Caspian Sea approximately 50 miles offshore Atyrau. The Kashagan field is the most important field in the 11 offshore blocks in the North Caspian Sea Production Sharing Agreement (PSA). 

The field’s first phase of development included constructing four artificial islands for wells, processing facilities, living quarters and pipelines to carry products onshore to oil, natural gas and sulfur plants. 

Kashagan is a joint venture between KazMunaiGaz, Eni SpA, Exxon Mobil Corp., Royal Dutch Shell plc, France's Total SA, and Japan's Inpex.

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