184 views

Kazakhstan's $50bn Kashagan oil field starts up production

Francesca Washtell
Follow Francesca
Kazakhstan Oil Industry Is Booming
The Kashagan oil field was first discovered in 2000 (Source: Getty)

Kazakhstan's huge Kashagan oil field has exported its first ever shipment, the country's energy ministry said today.

The field, located in the Caspian Sea, has loaded 26,500 metric tons of crude oil for export into local pipelines, the ministry said in an email.

The site has had a troubled history since being discovered in 2000. Bringing it online was forecast to cost around $10bn (£8.2bn) and be completed a decade ago, though total spending has now topped $50bn after multiple delays and overruns took their toll on the venture.

Read more: IEA says oil market will recover faster if Opec sticks to cut deal

Oil traders and the Organization of the Petroleum Exporting Countries (Opec) will be watching exports from the field closely, as it could influence whether the market manages to rebalance next year.

All eyes will be on Opec next month when the organisation meets in Vienna to finalise a provisional production cut, agreed last month, of 700,000 barrels per day that could go some way to tempering the massive supply glut plaguing the market.

Latest oil discovery: New Alaskan oil discovery could reverse 30 year decline

Oil prices hit a 14-month high on Monday, boosted by optimism that Opec will rally in favour of the output cut.

The price of global benchmark Brent crude was trading up 32 cents to $52.35 this morning, while its US equivalent West Texas Intermediate gained 53 cents to $50.97.

Related articles