* Shell had spent $900 mn on Khazar - KazMunayGaz
* Kashagan consortium drops plans for adjacent Kalamkas field
* Shell sees more competitive prospects in portfolio
Royal Dutch Shell has pulled out of the Khazar offshore project next to the giant Kashagan field in Kazakhstan and a multinational consortium including Shell is also dropping plans for the adjoining Kalamkas block, officials said on Monday.
‘The (Khazar) project was not competitive enough versus other opportunities in Shell’s global portfolio,’ the company said.
Shell had invested about $900 million in Khazar, a unit of Kazakh state energy firm KazMunayGaz said in a statement.
Shell, KazMunayGaz and Oman Oil Co were partners in Khazar, part of the Pearls offshore block. It was not immediately unclear if either of its two partners planned to buy Shell's stake.
Kazakh authorities said a consortium including Shell, Eni , ExxonMobil, CNPC, Total, Inpex and KazMunayGaz was also quitting Kalamkas, for which it holds the licence.
The Kalamkas-Khazar project costs were estimated at $5 billion with production starting in the late 2020s, according to Wood Mackenzie analyst Ashley Sherman.
‘Whether it’s because of tough logistics or complex geology, the shallow waters of Kazakhstan’s offshore face obstacles to full competitiveness against lower-cost deepwater opportunities elsewhere in the world,’ Sherman said.
Energy companies have spent more than $50 billion on developing Kashagan which has been plagued by delays and cost overruns.
Kazakhstan hopes Kashagan and its infrastructure will serve as an anchor for the development of smaller satellite fields.
LEAVE A COMMENT Your email address will not be published. Required fields are marked*
US weekly jobless claims blow past 6mn as virus lockdowns spread
Virus threatens revival of Japan’s deflationary nemesis
China to start buying oil for state reserves after crash
EU says it should have acted faster to help Italy after outbreak
StanChart chief presses for Bank of England clarity on bonus restrictions
Main street banks about to show how much risk they face
Japan’s stock buybacks face opportunity and threat
Al-Kuwari participates in GCC ministers meet through video conferencing
Mideast airlines’ record 4.3% growth in air freight demand in February: IATA