NUR-SULTAN (Reuters) – Energy company Royal Dutch Shell <RDSa.L> has pulled out of the Khazar offshore project in Kazakhstan, while a consortium of which Shell is a member has given up on Kalamkas, another small offshore block nearby, Kazakhstan said on Monday.
Khazar is located next to the giant Kashagan field, which the consortium is developing. Kazakhstan had hoped Shell would agree with its Kashagan partners on how to tap Khazar jointly.
But Kazakh authorities said the consortium, which also includes Eni <ENI.MI>, ExxonMobil <XOM.N>, CNPC [CNPET.UL], Total <TOTF.PA>, Inpex <1605.T> and Kazakh state firm KazMunayGaz <KMGZ.KZ>, was quitting Kalamkas, for which it holds the licence.
At the same time, Shell is leaving the Khazar project after investing about $900 million in it, a unit of KazMunayGaz said in a statement.
“Our partners’ decision is based on the low profitability of these projects against the background of high capital expenditures,” it said.
(Reporting by Tamara Vaal; Writing by Olzhas Auyezov; Editing by Edmund Blair and Dale Hudson)