It has been described as the world’s most expensive energy project.
Finally, nearly a decade late and five times over budget, the Kashagan oil field in Kazakhstan’s Caspian Sea has begun production.
A consortium including Shell, Total, Exxon Mobil and ENI once promised new riches for the former Soviet country with huge profits for shareholders.
That was before cost overruns, delays, government interference and internal disputes.
One energy analyst says it will be years yet before it makes a profit.
“A lot of money has been spent already, so in order to get a return on their expenses, companies will have to keep producing without investing a lot, maintaining the current level of about 400,000 barrels per day, for 10-12 years at least. Only after that will they probably be able to make a profit,” said Alexander Nazarov from Gazprombank.
The cost of developing the oil field was estimated at 10 billion dollars a decade ago but spiralled to 50 billion.
The Caspian’s icy and stormy waters meant several artificial islands had to be built instead of rigs. Gas and chemicals added to the technical problems.
Kazakhstan’s government is already making spending cuts due to the lower-than-expected oil revenues.
Copyright © 2014 euronewsMore about:
- 1NATO accuses Russian bombers of flying close to its airspace
- 2Turkish president Erdogan unveils his new palace of a thousand rooms
- 3France ‘to deliver’ Mistral warship, says Russia
- 4Transcript of hanged Iranian woman’s final message released
- 5France says ‘conditions not met’ for Mistral warship delivery to Russia
- 1euronews live TV - News | euronews : the latest international news as video on demand
- 2Two container ships collide on Egypt’s Suez Canal | euronews, no comment
- 3International tv news | euronews: European and International tv news bulletin
- 4Revealed: Europe’s capital cities where it’s hardest to be a foreigner | euronews, world news
- 5European Union News | euronews: latest breaking news and headlines about European Union
- 6Sweden becomes first European nation to recognise Palestine | euronews, world news
- 7All you need to know about the Ebola virus | euronews, world news
- 8How nasheeds became the soundtrack of jihad | euronews, world news
- 9What to expect in “The World of Ice and Fire,” George R.R. Martin’s new book | euronews, world news
- 10Where is the best place in Europe for women? | euronews, world news
- 11Philippe Starck: ‘Words like longevity and legacy have become almost avant-garde’ | euronews, the global conversation
- 12Ebola: Six new suspected cases in Spain | euronews, world news
- 13Learning through “serious games” | euronews, learning world
- 14US says ISIL makes $1 million-a-day selling oil – even to enemies | euronews, world news
- 15Mike Tyson: ‘You learn humbleness when you get older in life’ | euronews, the global conversation
- 16International news | euronews, latest international news
- 17International breaking news | euronews online world breaking news in video
- 18US delivers technical aid to Ukraine but warns over security | euronews, world news
- 19euronews apps : iPhone, iPad, Android, Windows Phone 8, Windows 8, Nokia S40, Nokia Asha, Smart TV and Google Glass
- 20Maritime drama deepens as Sweden extends ‘mystery submarine’ search | euronews, world news
Wires > News
- 14:15 CET Ukraine says EU to be guarantor in any Russia gas deal
- 14:12 CET Iran says foils bid to sabotage nuclear heavy-water tanks -…
- 14:05 CET Merkel not acutely worried about Russian violations of airspace
- 13:48 CET Pakistan province rewrites text books to satisfy Islamic…
- 13:47 CET Clashes erupt as Israeli police kill Palestinian suspected of…
- 13:04 CET Sweden recognises Palestinian state, hopes will revive peace…
- 12:37 CET Hong Kong protests a ‘national security issue’ for China
- 12:30 CET EU says Russia/Ukraine gas deal ‘very close’