What's new in production

The consortium developing the enormous Kashagan Field got a brief reprieve last month when the Kazakh government agreed to move the deadline for first production to 2013—the fourth delay since oil was struck there in 2000. The government had originally rejected the new development plan presented in June 2008—which also projected a huge total cost of $136 billion to reach first oil, up from $57 billion originally predicted—but reconsidered after securing a number of concessions from the oil companies. The new agreement, which will be finalized this month, highlights the many technical challenges that have turned the world’s largest discovery of the last three decades into one of the most difficult engineering problems in history. Even in the exploration stage, the consortium formed in 1997 to develop the northern Caspian Sea faced hurdles. Shell led the effort back then, with partners Statoil, Mobil, Total, Britain’s BP and BG, and Eni subsidiary Agip.