The Kashagan project is considered to be one of the most important field developments in the world. It is estimated to hold 38 billion barrels of oil-in-place, of which 16 billion are potentially recoverable reserves, and considered to be one of the largest oil finds discovered in the past three decades.

However, this great find is possibly one of the most challenging in the industry. Since its discovery, the project has faced several problems, including technical difficulties of extracting oil in a harsh climate, and the presence of sulphide in the associated natural gas. Because of these hurdles, the original production date, which was slated for 2005, was postponed to 2012.

Located in the North Caspian Sea approximately 50 miles (80 kilometers) 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 area spans 1,383,790 acres (5,600 square kilometers) and includes four additional fields: Kalamkas, Kashagan Southwest, Aktote and Kairan. The PSA was formed between the government of Kazakhstan and the Offshore Kazakhstan International Operating Company in 1997.

Then, the partners decided to create a consortium to act as a single operator on behalf of the seven partners. The consortium was named Agip Kazakhstan North Caspian Operating Company N.V. (Agip KCO), and consists of ENI (18.52 %), ExxonMobil (18.52%), Shell (18.52%), Total (18.52%), ConocoPhillips (9.26%), KasMunaiGaz (8.33%), and Inpex (8.33%).

Drilling Rig Sunkar

A shallow draft barge rig was contracted to drill five exploration wells south of Atyrau in the Northern Caspian Sea in the first offshore drilling operation attempted in Kazakhstan. The rig, the Sunkar floating production vessel, was completed in 1999 and towed to its first location to perform the drilling program.

Owned by Parker Drilling, the rig was extensively modified not only to function in the extreme climate but also to keep up with the strict environmental codes since the field lies in a nature preserve.

The rig was adapted at the Astrakhan yard, and measures 165 feet by 270 feet (50 meters by 82 meters), weighs 6,000 tons (5,443 tonnes) and can hold a maximum of 100 people.

To protect the rig from drifting ice, the Sunkar has two 102-inch high steel tanks that include 24 piles, each weighing 70 tons (64 tonnes), which break up the drifting ice before it reaches the steel tanks.

Discovery Wells

In 1998, ConocoPhillips acquired an interest in 11 blocks off the coast of Kazakhstan through the Republic of Kazakhstans NCSPSA. The drilling rig, Sunkar, drilled the first exploration well, Kashagan East-1. The well was completed as a discovery in 2000, when it was drilled in 10 feet (3 meters) of water and reached a total depth of 17,060 feet (5,200 meters). Shortly after finding the discovery well, appraisal operations began in May 2001.

Subsequent exploration drillings revealed four more giant fields: the Kalamkas, Kashagan Southwest, Aktote and Kairan. Kashagan West-1 was the second discovery well. Discovered in October 2001, the tests showed that the well flowed at a rate of 3,400 bopd, while the oil gravity measured between 42 and 45 API. The well was drilled to a total depth of 16,345 feet (4,982 meters).

Kashagan East-2 was discovered in late 2001 and was the third well drilled on the structure and the first appraisal well following the discovery of hydrocarbons at the Kashagan East-1 location. The well was drilled to a total depth of 13,589 feet (4,142 meters) and flowed at a rate of 7,400 bopd.

The oil found is light and has a high gas-oil ratio. The field is heavily overpressured which presented a significant drilling challenge. The recovery factor is relatively low due to reservoir complexity, with between 4 and 13 billion barrels being the estimated ultimate reserve.

Development

A development plan, adopted on February 25, 2004, commenced operations in 2006, which calls for the field to be developed through three phases. In 2007, a revised Kashagan development plan and budget were submitted, which further delayed the development and production dates of the project. Finally, after government officials and the consortium came to an agreement, field development continued with the production date set for 2012.

The first phase of development, which is under way, includes the construction of artificial islands for wells, processing facilities, living quarters and pipelines to carry products onshore to oil, natural gas and sulfur plants. Four large rock structures, known as artificial or drilling islands were created for the Kashagan field, and two additional islands were formed for the Aktote and Kairan fields. These six islands are linked between themselves and onshore operations by pipelines. The islands are used to collect and store oil, to ensure the initial separation of oil and gas and to maximize oil recovery and reduce sulphur production.

Oil and non-reinjected gas will be treated in the hubs and delivered through two separate pipelines to onshore treatment plants in Bolashak. At the treatment plants, the oil will be stabilized and purified; natural gas will be treated in order to remove hydrogen sulphide to be used as fuel for the production plants.

On May 18, 2009, Aker Solutions in partnership with Saipem received two significant contracts from Agip KCO for the hook-up work of the Phase I development of the Kashagan field. One of Aker Solutions' contracts includes the offshore hook-up, commissioning assistance, onshore pre-fabrication, all logistic support and inshore hook-up work. The other contract includes engineering and job carding for prefabrication and installation, and vessels preparation.

Additionally, Saipem received a contract for the production of crude oil and associated gases by two artificial island systems denominated Island Block A and Island Block D. The scope of work is scheduled for completion in 2012.

Initial production start-up of the first phase of development is scheduled for the third quarter of 2012.

Phase II

In January 2009, Aker Solutions received a front-end engineering and design services contract for Phase II of the Kashagan field. The scope of work includes the front-end engineering and design of both onshore and offshore facilities and pipelines. The FEED contract also includes options for early works, detail engineering, procurement services and technical assistance and design/system integration. The contract also provides optional FEEDS for the satellite fields: Aktote, Kairan and Kalamkas. The work is scheduled for completion in the first quarter of 2010.

Satellite Fields

The Kalamaks, Aktote, Kashagan Southwest and Kairan satellite fields are located in the Kazakhstan sector of the Caspian Sea and are adjacent to the giant Kashagan field. The consortium wholly owns and operates each field.

In 2002, the co-ventures announced a new hydrocarbon discovery in the Kalamkas well, located 40 miles (64 kilometers) southwest of the Kashagan field. Another discovery was made a year later, the Aktote-1 well, which reached a total depth of 19,275 feet (4,237 meters). The well tested at a rate of 1,550 bopd on a 28/64-inch choke. Appraisal of the Aktote discovery began in 2004, with the successful drilling of the Aktote-2 appraisal well.

Another discovery was made shortly after the previous discoveries, which proved the area had to be developed through multiple phases. The Kashagan Southwest-1 well was drilled to a total depth of 5,875 meters and tested at a rate of 2,100 bopd on a 32/64-inch choke. The last of the discoveries happened in 2004, when the Kairan-1 exploration well was discovered.

In 2005, appraisal drilling was conducted on Kalamkas, and 3-D seismic operations were carried out on the Kairan and Aktote prospects to further appraise the area.

While Kashagan is undergoing field development, the consortium is further exploring and appraising the satellite fields with hopes to develop them during Phase 2 and Phase 3 of the Kashagan project.