Enormous Oilfield Discovered in Caspian Sea

By Dev George

Kazakhstan President Nursultan A. Nazarbayev says he expects his country to be exporting 8 million b/d of oil by 2015, the same as Saudi Arabia, and the Kazakh Prime Minister Kasymzhomart Tokayev said "we are talking about big oil deposits," after returning from a visit to the drilling platform.

The Offshore Kazakhstan International Operating Co. has, indeed, found what may be the largest discovery anywhere in the world in the past 20 years and one of the world's five largest oilfields at its Kashagan prospect in the Kazakh aquatory of the northern Caspian Sea, according to Kazakh sources. The OKIOC partners AGIP, BG International, BPAmoco, ExxonMobil, Inpex, Phillips Petroleum, Shell, Statoil, and TotalfinaElf are not saying—not yet anyway. They are expected to announce the discovery at the upcoming Caspian Oil Show in Baku next month. (In March, it should be noted, Russia's Lukoil announced it had discovered a major field it the adjacent Russian aquatory with 2 billion bbl or more of recoverable oil reserves.)

Although efforts to determine the size of Kashagan have just begun, it is certain that it is large, and it is oil. Shaped roughly like an hourglass, the field, technically, Kashagan East 1AE, approximately 75 km (40 miles) south of Atyrau, Kazakhstan in the shallow northeastern Caspian, is a 2,000-sq-mile reservoir experts estimate to be nearly three times the size of the Tengiz Field, to its east, from 8 to more than 50 billion bbl of oil.

OKIOC carried out an extensive seismic survey of its 6,000 sq mile concession in the northeast Caspian during 1993-97 and identified a number of large oil prospects, including Kashagan. Because of the unique nature of the northeast Caspian, the consortium brought in the Parker Drilling Co. Rig 257, an arctic rig mounted on a swamp barge that had been working in Nigeria, and had it modified for the shallow water and icy winter conditions at Russia's Astrakhan Yard. Now the world's largest drilling barge, it has been renamed the Sunkar.

Drilling of the discovery well in the eastern end of the prospect began last August. After eight months, the salt dome was penetrated and natural gas was encountered, but that was soon bypassed and oil-bearing rock was reached as the operators approached their depth goal of 4,500 meters. OKIOC had planned to reposition the Sunkar on their second test well site some 60 km west once it reached TD, but test results have prompted them to carry on another 500 meters in hopes of finding the oil/water line.

Initial estimates of recoverable reserves are as high as 30 billion bbl, but Prime Minister Tokayev cautions that it is too early to give any detailed estimates. The bottom of the structure has yet to be found, however, making it very promising.

There is, though, a possibility that OKIOC may not declare Kashagan commercial or even call Kashagan East 1AE a discovery, that they may not even provide an estimate of the field's size when the announcement is finally made, because a formal announcement could establish the time limit for development of the field and commencement of export. If that happens, according to OKIOC's Production Sharing Agreement with the government of Kazakhstan, they may be contractually forced to start production by 2005. Be that as it may, Kazakhstan, already with Tengiz under its belt, appears to be taking its place as the Caspian's largest oil producer and perhaps one of the world's major oil plays.