Kazakhstan oil reserves
This August 2012 photo provided by North Caspian Operating Company, NCOC, shows Kashagan offshore oilfield in western Kazakhstan.
On Monday, Exxon released a climate report detailing how global climate policies are unlikely to impact their fossil fuel production for the next several decades, even as they acknowledged the threat of climate change as meticulously documented in the new IPCC report released the same day. However, a thorough analysis this week by the Wall Street Journal of the decades-long problems of developing the largest oil field discovered in the last 35 years is a reminder that climate policies are far from the only impediment to fossil fuel production that large oil and gas companies face in the early decades of this century.
Kazakhstanâ€™s Kashagan project, located in Kazakhstanâ€™s zone of the Caspian Sea, is estimated to hold as many as 35 billion barrels of oil with at least a third of those being recoverable. This is equatable to Brazilâ€™s total proven oil reserves of 13 billion â€” the second-largest in South America after Venezuela. Kazakhstan has the second-largest oil reserves as well as the second-largest oil production among the former Soviet republics after Russia. Once phase two is complete, the Kashagan project is expected to produce oil at a rate of around 1.5 million barrels per day, the equivalent of the average rate of crude oil production by all of Exxonâ€™s subsidiaries in 2013, according to Forbes, or about as much as the U.K. uses in a day.
Those are big numbers, but so are these: the Kashagan project was nearly a decade overdue and $30 billion dollars over budget when it started production last September. Then two weeks later a pipeline leak stalled progress, and then it happened again, and now the project is halted indefinitely with no resolution in sight. Things have gone so bad that Kazakhstan is suing foreign oil companies including Exxon, Royal Dutch Shell, Total, and Eni over delays and contract breaches.