Crippled Kashagan oil project a bureaucratic nightmare

I was over in Perth late last year and it was interesting to see how the end of the mining (construction) boom is impacting on the locals. The engineering types are in austerity mode while the technology folk are much less affected - with a new focus on "efficiency projects to try and squeeze more value from the massive investments made over the past decade.

Oil and gas services work has dried up to the point where one friend was forced to start looking at opportunities offshore (after following his once 120 person team into redundancy). He noted that the pay available elsewhere is far less than most Perth engineers have become accustomed too, and was considering heading to Kazahkstan for his next job.

Kashagan remains one of the larger projects underway worldwide - Reuters report that its not progressing all that well - Crippled Kashagan oil project a bureaucratic nightmare.

Giant Kazakh oilfield Kashagan, which was brought to a halt by leaks shortly after start-up last year, is grappling with a bureaucratic "nightmare" on top of its engineering troubles as it strives for commercial production in 2014.

The scale and complexity of the worlds most expensive standalone oil project led its seven partners away from the traditional single operator command-and-control model, where one of the larger companies takes charge while the others provide support and share the risks, costs and rewards. ...

The Caspian Sea project aims to exploit the biggest oil discovery in decades, producing a peak of 1.66 million barrels a day - as much oil as OPEC member Angola, from a reserve almost as big as Brazils. Much of it is built on artificial islands to avoid damage from pack ice in a shallow sea that freezes for five months a year in temperatures that drop below minus 30 degrees Celsius (-22F).

The field extends over 3,375 square kilometres (1,303 sq miles), and the whole onshore and offshore site is bigger still. The oil is 4,200 metres (4,590 yards) below the seabed, at very high pressure, and the associated gas reaching the surface is mixed with some of the highest concentrations of toxic, metal-eating hydrogen sulphide (H2S) ever encountered.

Kashagan has cost an estimated $50 billion so far, five times early projections, and its 13-year life is a tale mostly of delay.