WorldWide Drilling Resource

WorldWide Drilling Resource ® is proud to be a member of these international associations. New Zealand Drillers Federation, Inc. +03.324 2040 Ontario Groundwater Association Tel: 519-245-7194 Fax: 519-245-7196 ogwa@ogwa.ca www.ogwa.ca Australian Drilling Industry Association adia@adia.com.au British Colmubia Ground Water Assn. Tel: 604-530-8934 Fax: 604-530-8934 isecretary@bcgwa.org • www.bcgwa.org Alberta Water Well Drilling Association Tel: 780-386-2335 awwda@xplornet.com Atlantic Water Well Association Tel: 888-242-4440 Fax: 902-435-0089 nsgwa@ns.aliantzinc.ca • www.nsgwa.ca 45 WorldWide Drilling Resource ® NOVEMBER 2013 Kashagan Project Meets Production Deadline Adapted from Information by the U.S. Energy Information Administration and NCOC NCOC (North Caspian Operating Company) led by Italian oil company Eni reported production from the Kashagan project, installed on artificial islands in the Caspian Sea, has begun. Since the field's discovery in June 2000, this consortium, including its four original members (Eni, Shell, Total, and ExxonMobil), invested nearly $50 billion in the project to overcome several chal- lenges. The safety, engineering, logistical, and environmental challenges of the proj- ect has made it one of the largest, most complex, and most expensive industri- al projects being developed anywhere in the world. Those challenges caused the first phase of production, including the start of the first of the 21 production wells, to be eight years later than anticipated. Fortunately, the project was able to meet the October 2013 deadline set in the terms of the consortium's production sharing agreement (PSA). Had the deadline not been met, the consortium would have had to forfeit compensation for expendi- tures. Eni forecasts output from the initial development will reach 200,000 barrels per day (bbl/d) by the end of 2013, and then rise to the full phase-one target of 370,000 bbl/d in 2014. Kashagan has been an extremely complex project. Some of the challenges in bringing the project to production in- clude the field's great depth, reservoir pressure exceeding 10,000 pounds per square inch with lethal levels of hydro- gen sulfide, and cold temperatures which cause the northern part of the Caspian Sea to freeze for nearly five months of the year. The Kashagan facilities include two types of islands - small, unmanned drilling islands and larger, manned hub islands. Hydrocarbons will travel from the drilling islands to hub islands via pipeline. The Facilities for Kashagan, the largest oil field to be discovered in the past 35 years, are installed on artificial islands in the Caspian Sea. Photos courtesy of NCOC. hub islands contain processing facilities to separate recovered liquid (oil and water) from the raw gas, as well as gas injec- tion and power generation systems. The processed gas will then be used for on- shore and offshore power generation. A possible second phase would boost production to 1.5 million bbl/d. How- ever, the partners will need to determine if they will be able to recoup their expens- es and reach an acceptable level of prof- itability before the project's PSA ends in 2041. January’s deadlines are: Space Reservation - November 25 th . Ad Copy - Display & Classified - December 2 nd .