Alex Pasternack reports: The Kashagan oil field, located fifty miles offshore in western Kazakhstan’s Caspian Sea, takes its name from a 19th century poet and from the Kazakh word meaning “skittish” and “elusive.”
That’s one understated way to describe the oil that some of the world’s biggest companies are hoping to suck out of the Earth. In thirteen years, they’ve spent $50 billion, building islands and pipelines and digging deep, some two and a half miles below the surface, to reach a so-called supergiant oil field where sour crude is mixed with toxic gas at ungodly pressures. In industry circles, Kashagan has become a watchword for massive complexity and near impossibility, and adopted an unofficial motto: “cash all gone.”
Since geologists discovered the field in 2000, north of the also-massive Tengiz oil field, Kashagan remains the largest new oil deposit since the Prudhoe Bay field was found off Alaska in 1968. Estimates say that there are between 30 and 50 billion barrels (4.8 and 7.9 billion cubic meters) buried in a reservoir so complicated to plumb that only between four and 13 billion barrels are thought to be recoverable.
Even if the cost is five times that of a conventional oil development in Saudi Arabia, Kashagan alone could someday deliver as much as 1.2 million barrels per day; the US currently uses about 19 million barrels per day.
But thirteen years and $50 billion later, the global consortium operating Kashagan has produced almost no oil. [Continue reading…]