Kazakhstan wants tighter oil drilling controls post BP spill
June 3. Daily Telegraph
By Richard Orange
Kazakhstan wants to tighten environmental safety requirements on Royal Dutch Shell’s giant offshore Kashagan development in the wake of BP’s ongoing Gulf of Mexico disaster, in a further sign that the blow-out will increase the cost of oil projects worldwide.
Sauat Mynbayev, Kazakhstan’s Minister of Oil and Gas said: “It’s clear that we need the consortium members to take seriously the signals from the Gulf of Mexico event, and it’s clear that going forward, environmental issues will find their expression not simply in making more environmental constraints.”
Kashagan’s total expected costs have already ballooned from $57bn (?39bn) to $136bn, making it one of the most costly projects under development anywhere in the world today. Further safety measures risk making costs blow out still further.
Mynbayev said that Kashagan was in some ways much simpler than BP’s Gulf of Mexico well: while BP is drilling at a depth of 1.5km, Kashagan is in such shallow water that it almost qualifies as an onshore field. The development is taking place on an artificial island in the North of the Caspian.
But he said that the dangers were in other ways greater. An oil spill in the land-locked Caspian could have more far-reaching environmental consequences as the oil would have nowhere to dissipate, and the extremely high concentrations of sulphur in the Kashagan reservoir mean that a leak would kill anything living nearby. “Obviously we must take all measures to make sure that that doesn’t happen,” he said.
Shell has a 16.8pc stake in the North Caspian Operating Company developing the field, alongside France’s Total, and Italy’s ENI, which is overseeing the development.