en.Wedoany.com Reported - On August 6, ExxonMobil submitted an expansion plan for the Kashagan oilfield to Kazakhstan, proposing the formation of a joint venture with KazMunayGas on a 50-50 basis to jointly develop the undeveloped western section of the field. The plan involves a total estimated investment of approximately $80 billion, with the relevant area's potential output reaching up to 600,000 barrels per day. However, project advancement is tied to the resolution of long-standing disputes over the Kashagan oilfield and still requires approval from the Kazakh government. ExxonMobil, KazMunayGas, and the country's Energy Ministry have not yet commented on the matter.
KazMunayGas's currently announced Kashagan expansion plans include two phases, 2A and 2B. Phase 2A plans to leverage existing facilities to increase oilfield production to approximately 500,000 barrels per day, while delivering about 2 billion cubic meters of sour gas annually to third-party gas processing plants. Phase 2B aims to develop new areas of the field and build supporting infrastructure, raising overall production to approximately 710,000 barrels per day, while establishing an annual sour gas export capacity of about 6 billion cubic meters. Both phases are currently at the conceptual study stage.
The Kashagan oilfield is developed by North Caspian Operating Company, whose shareholders include ExxonMobil, KazMunayGas, Eni, Shell, TotalEnergies, CNPC, and INPEX. The field currently produces approximately 430,000 to 450,000 barrels per day, making it one of Kazakhstan's major oil and gas production projects. If the proposed new joint venture is approved, existing partners in Kashagan may also acquire minority stakes.
Project advancement remains affected by arbitration and environmental penalty disputes. The Kazakh government previously imposed an environmental fine of 2.3 trillion tenge on North Caspian Operating Company, equivalent to approximately $4.88 billion at the July exchange rate, related to sulfur storage volumes exceeding permitted limits during oilfield production. North Caspian Operating Company has contested the penalty, and the case is currently in international arbitration proceedings, with the tribunal having ordered a stay on enforcement of the fine pending dispute resolution.
