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Starting of Kashagan oil extraction postponed for last time

ITAR-TASS NEWS AGENCY

Starting of Kashagan oil extraction postponed for last time

28.06.2008, 13.23

ASTANA, June 28 (Itar-Tass) – The Kazakh government has agreed to postpone starting of commercial extraction of oil in Kashagan from 2011 to 2013, Energy and Mineral Resources Minister Sauat Mynbayev said at the government meeting on Saturday.

“A memorandum was signed yesterday, according to which, we have agreed to postpone the date to start commercial extraction to 2013,” the minister said, adding that if extraction was not within “the bounds of October 1, 2013”, Kazakhstan would not compensate for consortium expenses.

The negotiating team displayed enough adherence to principle to defend Kazakhstan’s interests. It achieved the maximum that could be done, Kazakh Prime Minister Karim Masimov noted.

At the same time, he hopes that it would be the last postponement.

Starting of oil extraction by the international consortium consisting of major world oil companies was originally planned for 2005, but then was postponed more than once. Last year, shareholders agreed to begin extraction in 2011. That and another project cost increase from 57 billion to 136 billion dollars resulted in doubling of Kazakhstan’s share in the consortium. Besides, the project leader, the Italian company ENI, will share the function of the operator with other participants.

Extractable oil reserves of Kashagan are estimated at 7-9 billion barrels, and the total geologic reserves of the giant oil deposit on the northern Caspian shelf — 36 billion barrels. The consortium consists of large international companies: Italia’s ENI, France’s Total, the English-Dutch corporation Royal Dutch-Shell, the American Exxon-Mobil and Conoco-Phillips companies, the Japanese corporation Inpex and Kazakhstan’s KazMunaiGaz.

 

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