Kazakhstan has confirmed that its Kashagan oil field faces further delays and production will start production before the end of 2011. The Kazakh government has blamed the extensive delays and cost overruns on its foreign partners, a consortium including Italy’s ENI, France’s Total, ExxonMobil of the US and Anglo-Dutch Shell.
As a result the Energy Minister Sauat Mynbayev demanded and received a bigger stake in the project. He told reporters that the state oil company Kazmunaigas will increase its share of the field from just over 8% to almost 17%. He added that ENI will lose its role as sole operator of the field after production starts. Total and Shell will join Eni in a new operating company, with Kazakhstan holding what Mynbayev called a “controlling function” in the field’s future development.
The Caspian Sea field is believed to contain the largest oil reserves found in the world since the 1960s – a total of 18 billion barrels. It will eventually produce 1.5 million barrels of crude per day.