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Kazakhs Consider Oil Refinery to Support Kashagan Project

Kazakhstan may construct the country’s fourth oil refinery within the framework of the Kashagan development in the Caspian Sea, Prime Minister Karim Massimov said.

“We are returning to the issue of building a fourth refinery in Kazakhstan so that we can be 100 percent sure that we will be physically independent in energy terms,” Massimov said today in an address to parliament in the capital, Astana.

The Kashagan field, one of the world’s largest, is expected to begin producing in 2013, Deputy Oil Minister Lyazzat Kiinov said in December, before he was appointed as head of KazMunaiGaz National Co. The company will raise $4 billion from the country’s National Oil Fund through bond sales to develop the field, President Nursultan Nazarbayev’s press office said today.

KazMunaiGaz, Exxon Mobil Corp. (XOM), Royal Dutch Shell Plc (RDSA), Eni SpA (ENI) and Total SA (FP) each hold a 16.8 percent stake in the field, according to the website of the North Caspian Operating Co., which manages the project. ConocoPhillips (COP) holds 8.4 percent and Japan’s Inpex Corp. (1605) has 7.56 percent.

Kazakhstan will raise oil production to 90 million metric tons a year by 2015 and to 120 million by 2020 from 81 million currently, Oil and Gas Minister Sauat Mynbayev said today during the parliament meeting.

“This increase is mostly connected with existing contracts such as TengizChevroil and especially Kashagan,” he said, adding that Kazakhstan will have enough oil sources to produce at an annual level of 120 million to 130 million tons for the next 40 to 45 years.

Crude oil and gas condensate output reached 80.1 million tons last year, less than planned by the government and an increase of 5 percent from 2010, the oil and gas ministry said on Feb. 2.

To contact the reporter on this story: Svetlana Antoncheva in Astana, Kazakhstan at santoncheva1@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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