Misty Kashagan shores

The first one is that there remains an interest towards oil resources of Kazakhstan in the world and Westerners without whose investments and technologies the industry cannot survive are not going to go away from here.

The second is that the way towards full realisation of the oil potential of the republic, when it brings big and visible revenues, is very long indeed. Longer than it seemed.

The thesis that by 2015 in Kazakhstan more than 150 million tons of oil will be produced against the current 50 million is well-known. True, it was argued against by several local experts, but these figures were recognised on the official level. Such forecasts are based on expectations from the Caspian shelf, which must start to justify those expectations in 2005. Exactly at that time Kashagan, the biggest field, as everybody expected, could enter the industrial development phase. Now it is clear that it won't. They prefer not to stress their attention on that. Clearly the beginning of Kashagan development in 2005 was not simply an important production stage, but it had a big political significance. They speak about some concessions from Western companies, operating at Kashagan. Possibly, some money will be received, but hardly big money. Anyway, not the money for which one could hope in the beginning of the big scale oil production. It is impossible to define precisely a just amount of compensation for what we didn't manage to get. Now prospects of reaching 150 million ton production by 2015 don't seem clear. Kazakhstani officials say that a two year delay in the beginning of production works at the shelf will not change neither terms nor volumes. May be they will maybe not.

However, starting to develop the shelf in 2007 making it yield several tens of millions tons will be very difficult. VERY difficult indeed. Moreover, safety measures for eco-systems of Caspian Sea and social infrastructure of shore regions should not be forgotten. It may be said that not only a cautious view of this matter, but actually a certain pessimism would be appropriate. At the same time main hopes for a growth of oil production in Kazakhstan are related with Caspian shelf, on land everything has been discovered, developing and there's nothing to expect.

Those who followed the development of situation over Kashagan attentively understood that the plans for 2005 were too optimistic. The problem is more serious. What will follow? Sooner or later, a couple of years more or less, but the oil production will start at the shelf. But how fast it is going to grow? According to Western oilmen, these questions are abstract. Too much investments are needed for carrying out works at the shelf and the process of attracting billions of dollars can last for decades. Some even talked about a thirty years term. It means that believing that the production at Kashagan starts from 2007, really big oil from this shelf will appear in the mid-forties of the current century. By tat tiem the production on onshore fields will drop inevitably, even now some of them operate in the regime of falling production. Will the Caspian offshore oil be able to compensate for declining rate of onshore oil production?

Obviously, oil, economic and socio-political expectations from the Caspian must be corrected. Western businessmen always stress that Kashagan and Kazakhstani sector of the sea are very important for Western Europe. It is clear, moreover many big companies participate in the project and it receives good coverage in international media. But it does not mean a short and even medium turn perspective of stably functioning "oil Eldorado" by KAzakhstani shores.