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AFX UK (Focus): Kazakh deputy finance minister says Eni’s operator role at Kashagan not in doubt

Published: Sep 05, 2007

ASTANA, Kazakhstan (Thomson Financial) – Kazakhstan’s deputy finance minister Daulet Yergozhin said Eni SpA’s role as operator of the Agip KCO consortium is not in doubt despite the delays in developing the Kashagan oil field, Interfax reported.

“We demand that they present us with a practical action plan to see how they are going to pursue this project,” he said.

He added that the Kazakh government expects to complete an official estimate of its losses as a result of the delays by Sept 7.

Yergozhin estimates the economic damage “will be in excess of dozens of billions of dollars.”

Eni originally planned to begin pumping oil from the field in 2005, but geological challenges and the harsh winter climate have forced the consortium to push back the start date several times. This summer Eni said it will not take up Kashagan production until 2010.

Eni is the sole operator of the Agip KCO consortium formed to develop the field, which has recoverable reserves of up to 16 bln barrels of crude.

Eni, Total, Exxon Mobil Corp, Royal Dutch Shell each hold 18.52 pct stakes in the consortium, while ConocoPhillips holds 9.26 pct and Inpex and the Kazakh national oil and gas company KazMunaiGaz each own 8.33 pct of it.

Eni is widely expected to offer the Kazakh government more favourable terms in its production sharing agreement.

Earlier the Kazakhs said they would demand an increase in their share of the future profits to 40 pct from 10 pct.

In addition, the Financial Times reported that the government is seeking at least 10 bln usd in compensation for the project delays and other matters.

Sources close to the talks also told Interfax today that Kazakh negotiators asked the ConocoPhillips’s representative to leave the discussions.

“We believe that ConocoPhillips does not view Kashagan as an important asset in that it sent a representative lower in rank than the other contractor organizations to the negotiations,” the source said.

“Kazakhstan expresses its discontent with this.” [email protected] amk/dca COPYRIGHT Copyright AFX News Limited 2007. All rights reserved.

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1 Comment on “AFX UK (Focus): Kazakh deputy finance minister says Eni’s operator role at Kashagan not in doubt”

  1. #1 Virgil Constantinescu
    on Sep 5th, 2007 at 09:19

    The real problem it’s this ENI it’s a very bad organize company.The CEO of ENI-this Scaroni-not have more than 2-3 years experience in the sector.Before he lead a british glass company!!!!!???
    In Kashagan,where I worked before they brought all the drunkers and lossers,all the vagabonds ,without experience in this kind of project.Also,this italian managers they like to talk to much and do nothing.
    With ENI Kashagan project never finish and it’s a good place for ENI managers to take bribes and commision from HR Agencies and material supliers.

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