The Kashagan oil field is situated in the Kazakhstan zone of the Caspian Sea. Discovered in 2000, it is estimated to hold 13 billion barrels of oil – enough to meet total global demand for five months. The Kashagan oil field is considered the largest oil discovery in the last three decades.
Harsh conditions, including sea ice during the winter and temperature variation from -35 to +40°C as well as extremely shallow water and high levels of hydrogen sulfide, make it one of the most technically challenging and therefore most expensive oil projects in the world.
The Kashagan oil field was originally supposed to cost only USD 10 billion and to be operational in 2005, but technical challenges delayed the project for more than a decade and increased the cost by a multiple. The project’s costs are currently estimated to be high above USD 50 billion and still on the rise.
In 2013, the Kashagan oil field began commercial oil production, but was quickly shut down because of corrosion in its pipelines. The replacement of the pipelines is currently in progress and production is estimated to begin again in 2017.
The oil field is developed by an international consortium under the North Caspian Sea Production Sharing Agreement consisting of Eni, Royal Dutch Shell, Total S.A., ExxonMobil, KazMunayGas, China National Petroleum Corporation and Inpex.