Kazakh president Nursultan Nazarbaev officially launched the largest oil and gas field in Kazakhstan - Kashagan, with reserves estimated at 35 billion barrels of oil.
"I'm here today to announce the launch of Kashagan," the President said at the launch ceremony, TASS reports.
"On November 1, 2016, Kashagan has reached the commercial production of more than 75 thousand barrels of oil per day. Currently there are works underway to increase the level of production and its stabilization at the level of 180 thousand barrels per day," the Energy Ministry of the Republic explained.
A senior scientist at the Institute of Oriental Studies of the Russian Academy of Sciences, Stanislav Pritchin, speaking with a correspondent of Vestnik Kavkaza, recalled that the project was supposed to be launched eight years ago.
"This process was postponed several times due to certain complexities, and eventually the amount of investments exceeded $100 billion. Therefore, from the standpoint of Kazakh economy we should not wait for a serious return from this project in the near future, because first of all the consortium developing this deposit should return money to investors. But in the long run, when the field reaches a planned production capacity, which is projected to be between 50 to 100 million tonnes, it will be a key oil deposit in Kazakhstan and one of the most serious sources of replenishment of the budget," the expert said.
Speaking about the full exploitation of the Kashagan field's impact on the economy of Kazakhstan, he stressed that it will be possible to speak about it in the medium term only when the field reaches planned production volumes and the country's budget starts to receive payments.
"Since this project has been expected for a long time, there is a well-developed transport infrastructure in the region. Part of the Baku-Tbilisi-Ceyhan oil pipeline's capacities can be used to transport Kashagan oil. Now there is a process of expansion of the Caspian Pipeline Consortium, which connects Kazakhstan to Novorossiysk and the Black Sea port. Its capacity should reach 67 million tons per year, which will allow to transport most of the Kashagan oil through the Russian territory. The higher oil prices are, the sooner the investment payments will be sent to the budget of Kazakhstan," Stanislav Pritchin concluded.
The production at the Kashagan field started September 2013, but in October, it was ceased after a gas leak in one of the main pipelines. The analysis revealed numerous cracks in the pipeline, which needed to be completely replaced. The output was again suspended shortly after its launch because of technical problems with the gas pipelines.
A leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation, Igor Yushkov, in turn, noted that commercial oil production at the Kashagan field will become "an essential tool for Kazakhstan". "It is clear that the republic cannot affect world oil prices, therefore, the only thing left for Kazakhstan is to increase production. Kazakhstan will be able to replenish its budget by increasing the export of oil, which can be implemented in both the eastern and western directions, in particular, China could buy Kashagan oil," he said.
"For Kazakhstan, it is really a very important and beneficial project, which will continue to develop rapidly. In the whole, oil in Central Asia oil is extracted by mainly Kazakhstan, as Turkmenistan and Uzbekistan, for the most part, produce gas. As for the main competitors - Russia, Azerbaijan, Iran - they have different markets, the main competitive intersection could be with Russia, which supplies oil to China," Igor Yushkov reminded.
