WSJ: How the giant Kazakh oil project went $30B over budget, years late

|By:, SA News Editor

Four global energy majors, 10 man-made islands and nearly $50B have added up to zero barrels of current oil production, as WSJ profiles the landmark Kashagan "elephant” project gone awry.

It’s a story of sky-high investment at a time of record-high oil prices that is generating very little in return, as well as the sort of uncapped spending that has characterized the push into new frontiers is now being reined in.

The project - co-developed by Eni (E), Total (TOT), Exxon (XOM) and Shell (RDS.A, RDS.B) - has been plagued by budget blowouts, engineering missteps and management disputes, and miles of leaky pipeline make up what is arguably the world's most expensive plumbing problem.

If the era of big spending is to continue - if the push into the Arctic or deep-offshore Brazil or uncharted territories like Mozambique and Myanmar is going to succeed - then the price of crude may have to move higher.