Extraction of the first oil at Kashagan has been postponed for 2007 - 2008 - Kazakhstan
25.02.04 17:29
/REUTERS, Astana, Raushan Nurshayeva, February 25, 04/ - Kazakhstan
authorities will receive "considerable" compensation from the consortium of
investors for postponement of the beginning of industrial oil extraction at the
great field Kashagan for 2007-2008, informed government's representatives
having kept from telling the sum of the fine.
Kashagan, which is situated in Kazakhstan sector of Caspian Sea shelf is the
largest oil field among revealed during the last 30 years. Kazakhstan, which
now extracts 1.0 million barrels of oil a day, hopes that after Kashagan's
development extraction will treble by 2015. It will let Kazakhstan become one
of the leading players at the world oil market.
International consortium, which was founded for Kashagan's development, has
found oil at the field in 2000 and, according to the terms of 40-year
production sharing agreement with Kazakhstan, it obliged to start industrial
extraction no later than in 2005. However the field's development is
complicated by geological difficulties of the bed, and also by the fact that
Caspian Sea freezes in winter that made the consortium postpone dates of
extraction start, and Kazakhstan, in response, demanded compensation.
After negotiations, which lasted since autumn of 2003 behind the closed doors,
the long-awaited agreement was signed in Astana on Wednesday.
"(This is) the document, which regulates moot points and the plan of the
field's development", - said minister of energy and natural resources Vladimir
Shkolnik informed journalists answering the question about the size of
compensation having said: "The sides have come to agreement about the
acceptable sum".
One day before the source in Kazakhstan government informed Reuters that it
was the matter of "hundreds of millions of dollars" of fine for postponement of
extraction start from the planned 2005 to later period.
"It doubtless that the achieved agreements satisfy all the sides", - said
Kazakhstan prime Daniyal Akhmetov to journalists answering the question about
the sum of compensation. On behalf of the state he and Vottorio Minkato, the
chief of the Italian Eni heading the consortium signed document named "Addition
for production sharing agreement concerning the Northern Caspian Sea of 1997".
CONSENTS OF THE SIDES
Data about exact period of extraction start is explained in a way.
"We presume that 2007-2008 will be the beginning of commercial extraction of
oil", - Akhmetov said to journalists.
At the same time, Britich-Dutch Royal Dutch/Shell, which is also included in
the consortium together with French Total, American Exxon Mobil and
ConocoPhillips and Japanese Inpex, informed in the press-release concerning
results of agreement signing, that the first oil from Kashagan would be
extracted since 2008.
"It's expected that initial extraction (from Kashagan) will be on the level of
75,000 barrels of oil a day and will grow to about 450,000 barrels a day during
the first phase of project's development. Following stages, as expected, will
let reach project capacity - 1.2 million barrels a day", - says the
press-release.
Before the source, which is close to negotiations of Kazakhsatn government and
the consortium, informed Reuters that it was planned to reach maximum
extraction level - 1.2 million barrels - by the year 2015.
According to consortium's data, the extracted reserves of Kashagan are equal to
nine billion barrels of oil that lets extract about 1.0 million barrels a day
(50 million tons a year) for long time. If the consortium succeeds to pump gas
into the bed, total volume of extracted oil may grow up to 13 billion barrels.
[2004-02-25]