7 December 2012 Last updated at 01:24 ET

Development challenge of Kazakhstan's giant oilfield

By Rayhan Demytrie BBC News, Kashagan oil field, Kazakhstan

It has cost $46bn (£28.8bn) to develop Kazakhstan's most ambitious project, Kashagan - a giant offshore oil field in the Caspian Sea, the world's biggest oil find in the past 40 years.

Kashagan holds about 13 billion barrels of recoverable oil. Simply put, it is enough to power the world for up to five months.

Once production starts next year, the majority of Kashagan's oil will reach markets in Europe and China, making it an important non-OPEC source of energy.

Kazakhstan sits on 3% of global oil reserves and is the second biggest oil producer in the former Soviet Union after Russia.

Kashagan, in the northern Caspian Sea, is a 20-minute helicopter flight from the town of Atyrau. From the sky it looks like an archipelago - but all of the islands are man-made.

Kashagan is owned by the North Caspian Operating Company (NCOC) consortium. Shell, Total, ENI, ExonMobil and the Kazakh state oil company KazMunaiGas each have a 16.8% share. The remaining 14% is split between ConocoPhillips and Inpex.

The main operational hub is known as Island D. It is a massive construction of hundreds of kilometres of orange-coloured steel racks that support the pipelines.

There are 12 oil wells on the island, huge power generators and a control room. Giant floating vessels serve as accommodation.

Five thousand people work on the island.

"It's like a small town, I've been working on this project for 13 years. It's amazing, for the first time, not just in Kazakhstan but in the world, it's a magic project in terms of its size," says Yerlan Amazholov, the oil spill response supervisor.

The oil will flow along pipelines buried beneath the seabed to the hub island from nearby unmanned drilling islands, and then a further 92km (57 miles) to a processing plant on the coast.

"Around 13 million tonnes of limestone had been used to produce these islands," says Robert Dunkley from AGIP KCO, an ENI-owned company responsible for the field's development.

"These mounds around the islands are in fact ice barriers to stop facilities from being overwhelmed with ice during the winter months."

"The Caspian in this part is ice-bound for up to five months a year, so this makes it difficult to get all that's required onshore and offshore."

Unique eco-system

But NCOC has more to contend with than the ice. Technically, Kashagan is one of the most challenging projects ever undertaken.

Conventional offshore production technologies that rest on the seabed cannot be used because the waters in this part of the Caspian are extremely shallow.

The oil lies 4.5km below the seabed. It is under immense pressure and is saturated with poisonous sulphur.

Any accident could spell disaster for the unique eco-system.

The northern Caspian is a major migration route for birds, a spawning ground for sturgeon and a habitat for the endangered Caspian seal that breed on ice.

"The artificial islands are constructed exactly in areas used by sturgeon for reproduction. There are hundreds of kilometres of pipelines, over 200 oil wells in such a fragile part of the sea which fertilises the entire eco-system of the Caspian," says ecologist Galina Chernova.

"When they start producing the oil, I doubt this eco-system will survive, it will become an industrial zone."

'Risky project'

In Soviet times, the northern Caspian was recognized as a nature reserve.

"After the break up of the Soviet Union, first Kazakhstan and then Russia changed this nature reserve status of the northern Caspian in favour of oil and gas projects," says Alexey Knizhnekov from the World Wildlife Fund Russia.

"We carried out research that shows that there are no real mechanisms to contain oil spills in icy conditions," he said.

"Leading environmental organisations are questioning the development of oil fields in the Arctic shelf. The northern Caspian is even worse case because there, you have shallow waters.

"In case of a spillage the concentration of oil will be much higher and more harmful for the marine life than in much deeper parts of the sea. We think it's a risky project."

But NCOC claims environmental safety is top of its priorities.

"The Kashagan project has been designed as a zero-discharge production facility," said Pierre Offant, NCOC chairman managing director.

"There is no discharge whatsoever to the sea. The islands are isolated from their environment by an impermeable membrane which is laid all across the island, which makes it completely separated from the sea and the seabed."

The impermeable membrane is a thick plastic that can contain leaks.

"It's like a giant, black swimming pool that is very strong. All the facilities offshore and onshore that contain fluid or gas have this underneath them," says AGIP KCO's Robert Dunkley.

Kazakhstan wants to be a top 10 oil producer. It is currently 18th in the world. Forecasters are confident that at full production, Kashagan will help double Kazakhstan's output before 2020.

Its environmental impact however may be less easy to predict.