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Production delay at Kashagan oil field

Oil & Gas Journal

Eric Watkins
Senior Correspondent

LOS ANGELES, June 30 -- The Kazakh government, winning important new economic concessions, agreed to a further delay in the start of production at the offshore Kashagan oil field after meeting with Agip Kazakhstan North Caspian Operating Co., the Eni SPA-led consortium developing the field.

"A memorandum was signed [June 27], according to which, we have agreed to postpone the date to start commercial extraction to 2013," said Energy and Mineral Resources Minister Sauat Mynbayev.

Kazakhstan's state-owned KazMunaiGas, which holds a 16.81% share in the project, said, "The Kashagan consortium has reached agreement with the government of the Republic of Kazakhstan on a detailed memorandum of understanding which expands considerably the agreements reached last December and January and paves the way for proceeding with the development project.

"In addition to the important adjustments to the economic terms, the new agreement also provides the Republic of Kazakhstan with substantial assurances that the project will be implemented in accordance with the approved schedule," KazMunaiGas said.