Kazakhs see Kashagan delay fine of $150 m.

/REUTERS, Astana, Raushan Nurshayeva, March 19, 04/ - An ENI-led consortium will soon pay Kazakhstan $150 million in fines for delayed commercial output from its mammoth Kashagan oilfield, Kazakh Finance Minister Yerbolat Dosayev told Reuters on Friday. "First, $100 million will be transferred, then $50 million," Dosayev said. Asked when the money was expected, he said: "Soon," but declined to give a precise date. Dosayev said further delays to output could result in additional fines for the consortium. "I cannot disclose all the figures. As for further payments...they will depend on each separate year. We have a schedule of payments." The ENI-led consortium and the Central Asian state signed a deal last month, agreeing to delay production from Kashagan until 2008 from the original target of 2005. At the time the terms of the agreement were not disclosed, but a government official said the fine could be worth "hundreds of millions of dollars." Eni declined to comment on the value of the fine quoted by Dosayev on Friday, but said compensation agreed in February was "to the full satisfaction of both sides." "It maintains the profitability of the project largely unchanged," an Eni source in Milan said. Dosayev said the cash paid by the Western firms was likely to be transferred to Kazakhstan's National fund, replenished by windfall oil exports revenues and tagged "the fund for future generations." The fund was worth $3.692 billion as of March 15. Kashagan, in the shallow Caspian Sea, is one of the world's biggest oil finds in the last three decades. It is set to be developed by the Western Eni-led consortium within the framework of a 40-year production sharing agreement with Kazakhstan. Kazakhstan, a vast resource-rich nation five times the size of France, aspires to become a major oil producer by tripling its crude output to over three million barrels per day by 2015. The government stakes heavily on huge deposits like Kashagan to achieve this target. The consortium companies have said the depth of the oil, far below the bottom of the Caspian which partly ices over in winter, is the main reason for pushing the date back. The ENI-led group -- which includes Royal Dutch/Shel, Total, ExxonMobil, ConocoPhillips and Japan's Inpex -- has invested over $2 billion in the field so far. According to Dosayev's words, the fine may be sent to the budget or to stabilization "fund of future generations" founded for accumulation of surplus profits in the period of high world prices for oil. "We will decide: either to the National fund or to the budget. In my opinion, to the National fund", - said the minister. [2004-03-19]