The Offshore North Caspian Sea Contract Area consists of two blocks, the eastern block (4,300 km2) and the western block (around 1,275 km2), with a combined total area of around 5,575km2. Of these, the Kashagan Oil Field lies in the eastern block, proximately 75 km southeast of the Kazakhstan city of Atyrau, at 3–5 meters deep in the Caspian Sea.

In September 1998, INPEX acquired a working interest in the Offshore North Caspian Sea Contract Area inside Kazakhstan’s territorial waters. Today, INPEX holds a 7.56% interest.

The Kashagan Oil Field was discovered during the first exploratory drillings in the block in September 1999.

The first discovery in the Kazakhstancontrolled part of the Caspian Sea, the Kashagan field is among the largest finds in the history of oil exploration.

A phased development of this field is planned, with the Phase 1 experimental program now under way.

The co-ventures agreed in October 2008 with the Kazakhstan authority to develop the Kashagan field, upon which the co-ventures established a new joint operating company, North Caspian Operating Company, which assumed the role of the former operator, Agip KCO,in January 2009. The production start is targeted for the end of 2012, with development under way currently.

Besides the Kashagan field, hydrocarbon reserves have also been confirmed in the four other structures of Kalamkas, Kashagan Southwest, Aktote and Kairan. Appraisal of these structures is continuing in parallel with the development of the main Kashagan field with a view to expanding the total production of the Contract Area.

Development of the Kashagan field is subject to strict environmental conditions. The international consortium of developers represents the highest level of technology and know-how, and work is being carried out with close consideration of the surrounding environment, and it is hoped that the development will lead to increased oil export revenues for Kazakhstan, the creation of employment opportunities in that country and the improvement of the economic situation for its people.

INPEX acquired a 10% working interest in the Azeri-Chirag-Gunashli (ACG) oil fields in April 2003. The fields are located in a region of the South Caspian Sea controlled by the Republic of Azerbaijan. In August 2010, INPEX purchased an additional interest (0.9644%) that increased its working interest to 10.9644%.

Oil production started in the Chirag field and has since expanded to include the Central Azeri field (February 2005), the West Azeri field (December 2005) and the East Azeri field (October 2006).

The Deep Water Gunashli field came onstream in April 2008. The New Chirag Oil Project (COP) was sanctioned in March 2010. The COP is the additional investment for the development of Chirag and the deep-water portion, including the shallow layer, of the Gunashli fields. Operations are under way so as to increase oil output from the ACG fields.

Most of the crude oil produced by the ACG fields is being transported from Baku, Azerbaijan, to Ceyhan, Turkey via Georgia for shipment from the Mediterranean coast using the BTC pipeline, a major oil transportation system that began full-scale operations in June 2006.

INPEX acquired a 2.5% interest in the BTC pipeline project in October 2002.

The 1,770-km BTC pipeline stretches from the Baku, Azerbaijan to Ceyhan on Turkey’s Mediterranean coast through Tbilisi, Georgia. Commencing full-scale operation in June 2006, thepipeline was originally built to transport crude oil produced in the ACG oil fields in Azerbaijan. The pipeline’s capacity was expanded up to 1.2 million bbl/d so that it can also accommodate future oil output from the Kashagan Oil Field in Kazakhstan.