[from Kazakhstan]

I've been reading here for a while... but it's the time to say something)
I know a lot about Kazakhstan's oil fields, not the last ones in the world. It's also my way to try myself in english speaking talks.

[ROCKMAN]

Welcome Mr. K! It would be great if you can keep us up-to-date on production rates as operations ramp up.

And your English is good enough. Some here speak perfect English but doesn't change the fact they have nothing worth listening to. LOL.

[rockdoc123]

yes, with Kashagan finally set to start producing at high rates the Kazakh story is worth revisiting.

[from Kazakhstan]

yes, with Kashagan finally set to start producing at high rates the Kazakh story is worth revisiting.

May be... We'll know soon, I guess)) Kazakhstan will start opening wells at Kashagan oil field in a few days, but the official start will be resumed on October 23.
Launch of oil production at Kashagan field may provoke a crisis of proposal on the oil market and frustrate growth of prices.

[GoghGoner]

yes, with Kashagan finally set to start producing at high rates the Kazakh story is worth revisiting.

May be... We'll know soon, I guess)) Kazakhstan will start opening wells at Kashagan oil field in a few days, but the official start will be resumed on October 23.
Launch of oil production at Kashagan field may provoke a crisis of proposal on the oil market and frustrate growth of prices.

Every month world demand grows by 100 kbd which is what the low range of the estimates are for this field in 2017. Now, if it was 300 kbd thrown on the market immediately there would definitely be a lower price for a short time but if demand is growing, this isn't a game changer. US consumption is 400 kbd over last years level and supply is down over 800 kbd since it's monthly peak. That right there is a difference of 1.2 mbd off the global market.

Welcome to the site. Always good to see somebody from Kazakhstan.

[jedrider]

CNN Money estimates that development of the field had cost US$116 billion as of 2012, which made it the most expensive energy project in the world. Where did that money go? It sure wasn't for Intellectual property, patents, or branding lol. It's a government project so the money wasn't spent on outside consultants, licensing, or leases.

That money was spend on hard iron, big machines, and diesel. US$116 billion cost the Russian 10 billion barrels of crude. The total estimated reserves of Kashagan itself. Who says EROEI is a meaningless metric?

I never heard a better argument that crude is grossly underpriced. I suspected so. Crude is crude, money is fungible.

[jedrider]

I believe you missed my point, jed. Crude is not underpriced. It will soon have no price. Crude is disappearing down the bore hole. How can you price something that is destroyed in its very creation?

Well, you can burn dollar bills and we ALL certainly needlessly burn crude byproducts, but at least we think we are accomplishing something in the process of burning crude. Mostly, providing jobs and, occasionally, a nice kitchen countertop. Yes, I'm guilty, too.

[ROCKMAN]

"It's a government project so the money wasn't spent on outside consultants, licensing, or leases." Obviously you've not been involved in "govt run projects". LOL. Lots of those $billions went to consulting firms and outside suppliers who were awarded contracts for " competitive " bids. Like the Columbian trucking company that was awarded a muilti-billion contract even though they had almost no experience in that type of project.

But perhaps you don't think politicians are capable of taking HUGE payoffs? Which means you never lived in La. as the Rockman has. LOL.

[KilonBerlin]

yes, with Kashagan finally set to start producing at high rates the Kazakh story is worth revisiting.

May be... We'll know soon, I guess)) Kazakhstan will start opening wells at Kashagan oil field in a few days, but the official start will be resumed on October 23.
Launch of oil production at Kashagan field may provoke a crisis of proposal on the oil market and frustrate growth of prices.

Every month world demand grows by 100 kbd which is what the low range of the estimates are for this field in 2017. Now, if it was 300 kbd thrown on the market immediately there would definitely be a lower price for a short time but if demand is growing, this isn't a game changer. US consumption is 400 kbd over last years level and supply is down over 800 kbd since it's monthly peak. That right there is a difference of 1.2 mbd off the global market.

Welcome to the site. Always good to see somebody from Kazakhstan.

Hello,

to everybody from Central Europe... this above would be only if Kazakhstan would be directly (and almost only) connected to the US oil market, like Canada.

But since the price dropped the OPEC tried to kill US and Canadian projects (Shale Oil and why not also Shale Gas, Fracking, Horizontal drilling, drilling at all since it was said US shale oil in Bakken needs 50$ to run without loss and Canada needs even 70 US-$ for Alberta non-conventional which makes up the majority for a longer period already, much conventional or just heavy crude in Alberta too, but production is declining since the Oil Sands with their unbelievable reserves were easier than hard to find and drill conventional fields.

OPEC said after flooding the market and bring it down (the US and Saudi-Arabia brought down the Soviet Union or at least made the process much faster, Soviet Union western currency income in 1985/86 was only around ~16 billion US-$. This was much more 30 years ago but still only an average Forbes 100 company income. Than the famous OPEC quota came and reserves increased over night often, all together I think far over 100 billion barrels were added to get better quotas. But also in 1973 Libya did a over night production cut from ~3.2mbpd down to the average of 1.0 - 1.4mbpd until this day, they produced in peace time often less than its neighbor Algeria. Just that Libya has 4 times as high reserves and even larger ressources. But a so small population, the 2000's BRIC boom, no need to invest and climb to over 2 or even 3 million barrels again.

OPEC planned the US/Canadian production to reach a critical point in April or May 2015! This did not happen yet and most members are in financial troubles. They even retook a over 50% net importer in December 2015 with Indonesia and in June 2016 another old member with Gabon. Both left, Gabon in 1994, I don't know why. Maybe they did not wanted any quotas anymore or so, Indonesia left because it said it is now a large importer, and this became even worse. Even Russia was invited to join the OPEC but rejected - I would too being Putin.

I think OPEC does not care if export or import, they want as much production in "their hands", and have a growing oil market to export since Indonesia will only import OPEC oil in the future I guess. Production is falling, demand is slowly rising.

I only see 2 scenarios for Europe/US. Both are not good for OPEC or Russia.

[KilonBerlin]

test - all for nothing or admin needed?!

[Subjectivist]

I've been reading here for a while... but it's the time to say something)
I know a lot about Kazakhstan's oil fields, not the last ones in the world. It's also my way to try myself in english speaking talks.

How was your weather this winter? How is your economy there? It is hard to get news from your country here in Toledo.

[sparky]

.
OPEC was set up , with US good office ,to keep the price of crude low .
Once this is considered , the whole policy make sense
certainly more than some "market share" idea , Saudi Arabia could have increased it's market share easily enough without driving the price down to 20$/b ,
obeying their Washington master to hurt Russia sound like a better theory, they just got caught with it

[KaiserJeep]

?????
I thought OPEC was set up to agree upon crude production quotas which keep the prices higher, not lower.

[ROCKMAN]

"Also to maintain market stability". And as Dr. Phil would ask: "How's that working for you?" The only truly effective cartel to stabilize prices was run by the Texas Rail Road Commission. From the after WWII to the early 70's prices slowly declined but in a very controlled mode. See chart:

http://www.macrotrends.net/1369/crude-o ... tory-chart

Which is remarkable given this was a boom time period in Texas when some of the most prolific oil trends of all time were developed. It controlled oil production rates by using the proration regulation: the TRRC would monthly set the % of oil every well in Texas. And it controlled the global price of oil because at this time Texas was THE source of oil exports for the entire world. The law developed out of the boom brought on by the discovery of the giant East Texas oil field:

"The State proration regulations of the East Texas Field are based upon the Oil and Gas Conservation Act enacted in 1919 by the State Legislature under authority of a constitutional amendment voted August 31, 1917, which required the Legislature to pass laws for conservation and development of the natural resources of the state. The Oil and Gas Conservation Act of 1919 prohibited production of crude oil “in such manner and under such conditions as to constitute waste” and the Texas Railroad Commission was charged with doing “all things necessary for the conservation of oil” and with establishment of “such rules and regulations as will be necessary to conserve the oil and gas resources in the state.”

To conserve the oil and gas resources: read to not sell those resources cheap. Violations of the proration regs in the East Texas Field led the governor to declare marshal law, sent in the state guard, arrested some operators and shut the entire field in.

But that came crashing to a halt just as US oil production peaked, domestic consumption boomed post war and the giant ME fields were being developed. But the TRRC still has the authority to reduce the production of every oil well in the state: each month the commissioners set the allowable percentage. Since the early 70's it has been set every month at 100%.