How Much Will Kashagan Cost Big Oil When It's All Said and Done?

Following Total's announcement that the Kashagan project will not produce oil until 2015, how costly will this oil be for its developers?

Tyler Crowe
Tyler Crowe
Apr 29, 2014 at 4:00PM
Energy, Materials, and Utilities

Senior executives at Total (NYSE:TOT), ExxonMobil (NYSE:XOM), and Royal Dutch Shell (NYSE:RDS-A) (NYSE:RDS-B) are probably thinking to themselves that they've made a huge mistake for taking on the Kashagan oil project in the Caspian Sea. It may have seemed like a good idea at the time. It was, after all, the largest oil find in decades. Now that the project has been delayed yet again because of corroded pipes on the sea floor, it will likely not start up again until sometime in 2016.

These large oil players certainly have the balance sheet to handle the delays and high costs, but paying for a project that could end up costing more than $120,000 per flowing barrel of production for what will eventually be a major contributor to each company's production portfolio could be a deterrent to the company's return. In the video below, find out how this price tag relates to other major projects around the world and what it will mean for Total, Exxon, and Shell long term.