This Home of Mega-Oil Finds Is Reforming

This article was written by Oilprice.com -- the leading provider of energy news in the world.

News emerged this week that major energy reforms are coming in one of the most intriguing exploration centers on the planet: Kazakhstan.

Kazakh president Nursultan Nazarbayev said he is disbanding the country's reigning energy authority--the Ministry of Oil and Gas.

In its place, Nazarbayev will create a new and broader regulating body, one that combines the functions of the oil and gas ministry with other departments like industry and technology, environment, and water resources.

The president made the sweeping move after declaring that Kazakhstan's energy sector is in "complete chaos."

Nazarbayev didn't elaborate on exactly what those difficulties might be. But analysts have noted that Kazakhstan's energy sector has been plagued by permitting delays and regulatory uncertainty -- the kind that has almost completely undermined some of the country's recent megaprojects.

One of the highest-profile hits has been the Kashagan oil project in the offshore Caspian Sea, which is one of the largest oil finds over the last few decades, at an appraised recoverable resource of 11 billion barrels of crude.

But Kashagan today sits idle, with start-up of the field in September 2013 having been scuttled by leaking pipelines at the massive facility and an attempted restart in October aborted after more leaks were discovered.

That's led to a complete shutdown of this massive field. A restart is now targeted for 2016.

The reasons behind these problems could have a lot to do with Kazakhstan's patchy regulatory framework, with ownership of Kashagan having been shuffled several times between the government and project's developers--which include Italian multinational Eni, Shell, ExxonMobil, Total, and China National Petroleum Corp.

Uncertainty over ownership (and operatorship) undoubtedly affected Kashagan during construction, which may be why the engineering work is turning out to be less than world-class.

We'll see if the new reforms really can streamline the environment for energy projects here. If so, there could be a lot of supply -and a lot of developers--who will benefit.

Do you know this energy tax "loophole"?
You already know record oil and natural gas production is changing the lives of millions of Americans. But what you probably haven't heard is that the IRS is encouraging investors to support our growing energy renaissance, offering you a tax loophole to invest in some of America's greatest energy companies. Take advantage of this profitable opportunity by grabbing your brand-new special report, "The IRS Is Daring You to Make This Investment Now!," and you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.

 


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3069577, ~/Articles/ArticleHandler.aspx, 9/15/2014 12:31:22 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 16,987.51 -61.49 -0.36%
S&P 500 1,985.54 -11.91 -0.60%
NASD 4,567.60 -24.21 -0.53%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes


Advertisement