Partners in Kashagan Field Undecided on Development Plan

The members of the Agip-led Kashagan consortium are of differing opinions how to develop the huge Kashagan Field in the Caspian Sea which is estimated to contain 13 billion barrels of oil. The economics of developing the field are considerable since its one of the most difficult areas of the world in which to work.

As the production deadline approaches, consortium members face rising logistical constraints after drilling only four exploration wells. Kashagan's oil lies at depths of 4,000-5,000 meters in shallow water, which freezes in winter. "We have to operate in very difficult conditions, which are sometimes more difficult than in the Arctic, because the ice moves rapidly," said Domenico Spada of Agip. Other obstacles being faced are delivery of equipment to the Caspian Sea and how to ship oil to international markets once production has commenced. However, the main concern is the abnormally high pressure in the field, which contains huge volumes of mercaptans and poisonous hydrogen sulphide gas. ChevronTexaco has spent millions of dollars to offset the problem of hydrogen sulphide at its onshore Tengiz field, but experts say it will be much more acute in the ecologically sensitive sea

Agip says development work is on track and production is expected in 2005. The consortium plans to build several artificial islands, a large gas processing plant and storage units for sulphur. It will offset the high pressure by reinjecting gas into the field. Partners in the consortium are Agip as operator, ExxonMobil, Shell, TotalFinaElf, BG Inpex and ConocoPhillips.