OPEC Is Disappointed In Kashagan
OPEC said Thursday that even though oil supply from Kazakhstan has increased, its Kashagan oilfield has "sucked in" major capital with little to show for it.
The cartel said in its monthly market report that oil supply from Kazakhstan rose by 60,000 bpd year-on-year to average 1.64 M/bd.
Kashagan is estimated to hold 16 billion barrels of oil reserves. Last October, only a month after production started, it was halted when a pipeline linked to the field cracked open.
OPEC said in the report that the final results from pipeline inspections are not due until 2Q14. However, the project has already taken in substantial investments.
OPEC said, "The giant Kashagan project has sucked in almost $50 billion without yielding a barrel of oil."
The North Caspian Operation Company has been quiet with regard to project developments at the giant field, OPEC said. The Kazakhstan government is currently seeking $737 million in damages from the seven-member consortium for "excessive flaring" of natural gas from other projects.
OPEC said in its report that total oil supply from Kazakhstan is forecast to rise by 9.6% by the end of 2014 despite lackluster first and second quarters.
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