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Central Asia news roundup

The Central Asian oil and gas industry has seen a number of significant developments in recent weeks, from a new announcement on plans for the giant Kashagan oil field to the launch of a major gas pipeline connecting Turkmenistan to South Asia. 

Kashagan oil field 'to launch in late 2016'

The long-awaited launch of Kazakhstan's Kashagan offshore oil field could take place at the end of 2016, according to the country's economy minister Yerbolat Dosayev.

Considered to be the world's largest oil discovery of the last three decades, Kashagan is estimated to hold recoverable reserves of about 13 billion barrels of crude oil. 

However, it has proven severely challenging to develop, due to a combination of very shallow water, extreme temperature variations, widespread sea ice in winter and numerous examples of mismanagement.

Development of the field had cost $116 billion as of 2012, according to CNN Money, making it the most expensive energy project in the world.

Speaking at a government meeting earlier this month, Dosayev revealed that commercial oil production on the field could begin in December 2016. If this new deadline is met, the field is expected to yield 13 million tons of oil in 2020.

Kazakh state oil company unit to be controlled by private Chinese firm

CEFC Energy, a private Chinese firm, is to take over a unit of Kazakhstan's state oil and gas company.

The move, which was unveiled as part of a wider $4 billion package of deals between the neighbouring countries, comes as China attempts to recreate the historic Silk Road trade route by building oil and gas facilities, roads, railways and power grids throughout Central, West and South Asia.

A statement from CEFC and comments from two senior sources at the firm reveal that the company will acquire a 51 per cent of KMG International, a state-owned unit of KazMunayGas, reports Reuters. According to one of the sources, the deal is valued at between $500 million and $1 billion.

Commenting on the deal, Ben Simpfendorfer - managing director at Hong Kong-based consultancy Silk Road Associates - told the news agency: "Kazakhstan will be keen to secure external financing for energy projects with oil prices threatening to drop further."

US official urges Turkmenistan to ease foreign gas investment rules

The Turkmen government has been urged to consider relaxing its rules on foreign investment in natural gas if it is to take full advantage of the world's fourth largest reserves.

The country has traditionally offered only service contracts for its sizeable onshore gas fields, rather than production-sharing agreements.

However, Daniel Rosenblum, deputy assistant secretary for Central Asia at the US Department of State, argued that Turkmenistan must consider adopting a new approach in the face of significant rivalry from other hydrocarbon-rich nations.

"Land-locked countries with potentially large resources, such as Turkmenistan, need to move expeditiously to capture market opportunities since their competitors are not idle," he explained.

LUKOIL ups investment in Uzbek gas production and exploration

Russia's second-largest oil company increased its investment in gas exploration and production in Uzbekistan between January and September.

The value of Lukoil's production and exploration work in the country reached $759 million over the nine-month period, up from $549 million at the same point in 2014.

Reports from the company show that in the third quarter alone, Lukoil invested $263 million in Uzbekistan, against $248 million a year earlier.

Previous reports have indicated that the company intends to produce at least 18 billion cubic metres of gas per year in Uzbekistan by 2016.

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