Kazakhstan threatened to re-examine its contract with Italy’s Eni to develop the Kashagan oilfield, one of the world’s largest, following a new delay to its launch.
“I warn the company that we regard changes to the timetable for Kashagan as a change to the contract itself. Our actions will be appropriate,” Prime Minister Karim Masimov said, Interfax reported. “A contract should be respected by both parties,” he said during a government meeting in the Kazakh capital Astana.
Eni, which is the lead operator of the Kashagan field, announced last week that the field would start production in 2010 rather than 2008. It was the second time that the company has pushed back the date, which was first set for 2005.
Energy minister Baktykozha Izmukhambetov said that Eni had also upped the project’s estimated cost to $136 billion, from the $57 billion originally planned.
Negotiations between Eni and the Kazakh government are set for August 6.
Kashagan, located in the north-east of the Caspian Sea, has been billed as one of the largest oil discoveries of the past 30 years, with a minimum of 7 billion to 9 billion barrels of extractable crude from total reserves of 38 billion barrels.
Partnering with Eni in the project are French energy company Total, Royal Dutch Shell, ExxonMobil, ConocoPhillips, Japan’s Impex, and Kazakhstan state-owned KazMunaiGaz.
(Middle East Times)