Kazakhstan expects agreement with Agip KCO concerning Kashagan in February of 2004

/REUTERS, Astana, January 28, 04/ - Kazakhstan hopes to make agreement in February with the consortium Agip KCO headed by Italian company ENI about terms of postponement of the first oil extraction at the giant field Kashagan at Kazakhstan shelf of Caspian Sea, said the prime-minister Daniyal Akhmetov. First the consortium and Kazakhstan authorities expected the first oil from the field, which was the biggest one among all the fields revealed in the world within the last 30 years in the end of 2005, however afterwards ENI stated that it would occur not earlier than in 2006-2007. Kazakhstan in response demanded compensation, and since the beginning of autumn of 2003 the sides have been negotiating behind closed doors. "We very attentively watch the situation at Kashagan, and we think major questions have been regulated in the whole", - said Akhmetov on Tuesday during meeting with French ambassador Jerar Perroli. "I think in February drawing up of main documents, which will let regulate the process and end juridical formalities, will be finished", - Akhmetov's press- service quotes him without giving other details. The sides several times called approximate dates of negotiations completion, but they always moved further. Minister of energy and mineral resources of Kazakhstan Vladimir Shkolnik used to say before that sum of compensation for oil extraction postponement might exceed $150 m. Besides ENI the consortium, which has been founded development of Kashagan, comprises French Total, American Exxon Mobil and ConocoPhillips, and also Royal Dutch/Shell and Japanese Inpex. According to the consortium's data, reserves of Kashagan are equal to 9 bn. barrels of oil that lets extract about 1.0 m. barrels a day (50 m. tons a year) during a long time. Kazakhstan estimates reach 2.4-3.2 bn. tons of oil (21.6- 23.4 bn. barrels). However development of the field is complicated by geological difficulties of the field, and also by the fact that Caspian Sea freezes in winter. Consortium has already invested $2.2 bn. into the project, and sources in the consortium say the first phase of industrial development of the field may cost $9 bn. that will make Kashagan the biggest oil project in the world. Kazakhstan, which now extracts about 1.0 m. barrels of oil a day, concerns Kashagan's development with hopes for trebling of extraction by the year 2015, that will let it become one of the leading players at the world oil market. [2004-01-28]