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Bloomberg: Eni to Start Pumping at Giant Kashagan Field in 2010 (Update2)

By Nariman Gizitdinov

Feb. 16 (Bloomberg) — An Eni SpA-led venture developing the Kashagan oil field, Kazakhstan’s largest, won’t start production until a year later than it had expected.

“Commercial production won’t start until 2010,” Kazakh Energy Minister Baktykozha Izmukhambetov said today, according to an e-mail from ministry spokesman Chingis Mukhanov.

Royal Dutch Shell Plc, an investor in the $29 billion project, said earlier this month that production would begin “about 2009.” International Oil Daily said yesterday that output probably wouldn’t start until 2011 or 2012.

Production will start at about 50,000 barrels a day and then rise to 450,000 barrels a day before reaching a maximum of 1.5 million barrels a day by about 2015, higher than the earlier estimate of 1.2 million barrels, International Oil Daily said, citing unidentified people close to the Eni-led group.

KazMunaiGaz, the Kazakh state-owned energy company, said in January it plans to investigate the delays and overruns, which cost the venture $150 million in fines in 2004, according to state-run news service Kazinform. Kazakhstan, which is among the top 10 countries in terms of oil reserves, needs to tap the field to meet its goal of almost tripling production by 2015.

Offshore Mining

Agip KCO, the Kashagan operator, said early last year the current plan for the mining complex determines the level of toxicity at the field, Zhaksybek Kulekeyev, the first vice president at KazMunaiGaz, said today in an interview.

“Agip KCO is studying the variants to change the offshore complex to cut the risk,” Kulekeyev said.

About 60 percent of the development work at Kashagan is complete, KazMunaiGaz President Uzakbai Karabalin said in January. The main reasons for the delay are the complex geology of the high-pressure reservoirs and the dangers posed by the high concentrations of hydrogen sulfide gas they contain.

“We starts our own investigation with inviting of independent internationally know consultants,” Kulekeyev said.

KazMunaiGaz said in January it planned to start transporting oil across the Caspian Sea to a pipeline run by a BP Plc venture by 2011. Oil will be sent from the Kashagan and Tengiz fields by a pipeline from Yeskene to the port of Kuryk. From there it will be shipped by tanker across the Caspian to Azerbaijan, where the Baku-Tbilisi-Ceyhan pipeline to Turkey starts.

To contact the reporter on this story: Nariman Gizitdinov in Almaty, through the Moscow newsroom. Last Updated: February 16, 2007 09:19 EST and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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