Launch Of Kashagan May Frustrate Rehabilitation Of World Oil Prices – BofA Merrill Lynch
Launch of oil production at Kashagan field may provoke a crisis of proposal on the oil market and frustrate growth of prices, reports the Bank of America Merrill Lynch Global Research.
“The meeting scheduled on September 26 in Algeria of the representatives of oil producing states will focus on the risks around oil supply volumes. (…) Together with possible delivery of big volume of hydrocarbons by Nigeria and Libya to the world market, launch of oil production at Kashagan field are among the most important factors able to put barriers for rehabilitation of oil prices even on the background of forecasted reduction of production in Venezuela, China and Iraq,” the message reports.
Taking in account the existing risks the average oil price may lower to $52 per barrel in 2017 and grow to $69 depending on the scenario.
First oil production at Kashagan may trigger offers crisis on the oil market and to prevent the rise in prices, the report said Bank of America Merrill Lynch Global Research.
“On the eve of the scheduled on September 26 at a meeting of representatives of Algeria, the oil-producing countries in the focus of public attention again are risks around the volume of oil supplies. (…) In addition to the possible withdrawal of the world market of large amounts of Nigeria and Libya hydrocarbons start commercial oil production at the Kazakhstan Kashagan allocated among the three most important factors that could hinder the recovery of oil prices, even against the background of the projected decline in production in Venezuela, China and Iraq, “- said in the text.
Taking into account the existing risks in the average price of Brent crude oil in 2017 could fall to $ 52 a barrel or rise to $ 69, depending on the implementation of a script, specify the experts.
The report states that an estimated $ 53 billion in the Kashagan field was discovered in 2000, industrial production was scheduled to start in 2007 and postponed many times.
In his speech on September 14, recalled in the report of the RK Minister of Energy (Kanat Bozumbayev – KazTAG) announced the official launch of commercial production of Kashagan oil October 23 with access to the output of 75 thousand barrels per day.. a day at the beginning of November. A few days earlier company Eni shared her plans to start work at the beginning of the field at the end of September. By the end of the year, according to the developer’s expectations, oil is to be up to 230 th. Barrels. in a day.
“Whatever it was, some skepticism, still retained in respect of the start of production plans in this field,” – the document says.
Kashagan – a major oil and gas field in Kazakhstan, located in the north of the Caspian Sea. The geological oil reserves, according to recent data, estimated at 35 billion barrels. His commercial resources, according to experts, are in the range from 9 billion to 13 billion barrels. oil. There are also large reserves of natural gas – more than 1 trillion cubic meters.