NCOC Announces Expansion at Kashagan Field

North Caspian Operating Company N.V. (NCOC), Operator of the North Caspian oil and gas project offshore Kazakhstan, announced that it has approval from the Government of Kazakhstan to start early engineering and design work toward a further expansion of Phase 1 production at the Kashagan field. 

The Government acknowledged commencement of commercial production at Kashagan on November 1. Kazakhstan’s President Nursultan Nazarbayev honored the project and its workers and veterans with a personal visit to Atyrau on December 7. 

This announcement signals that NCOC will lose little time in building upon its accomplishment of a safe restart at the field, thought to contain 9-13 billion barrels (1-2 billion tonnes) of recoverable oil. The scale and technical complexity of the North Caspian project will require development in phases over several years. 

The expansion project for Phase 1, called CC01, is an investment to increase production by 80 thousand barrels per day by installing additional raw gas compression and injection capacity offshore, in the Caspian. The Government’s approval allows NCOC to progress early engineering and design work in 2017, and to develop plans for further engineering and design work in 2018. The project, when completed, could grow Phase 1 production capacity to a target level of 450 thousand barrels per day. 

NCOC Managing Director Bruno Jardin said “We are excited that the safe restart at Kashagan has opened the way for us to build further on what we’ve already accomplished. NCOC has an opportunity to increase the capital effectiveness of our pre-invested assets, and we intend to do so with a relentless focus on cost reduction, applied at the earliest stages, through a disciplined value engineering engineering process”.

Mr Jardin added, “NCOC is also studying the potential co-development of its Kalamkas-Sea field and CMOC’s nearby Khazar field. Together these two fields have recoverable reserves of 67 million tonnes of oil and 9 b.c.m. of gas. We hope that the cost savings that can be achieved by the joint development of these fields will make their development economically viable, and if so possibly also unlock the development of other fields in the Mid-Caspian”.

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