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Low Oil Price, Econ Crisis May Cut Kashagan Costs – Shell

March 10, 2009: 07:12 AM ETDow Jones

ALMATY, Kazakhstan -(Dow Jones)- Low oil prices and the economic crisis may cut costs of development at Kazakhstan’s largest oil field Kashagan, Royal Dutch Shell PLC’s (RDSA) general manager for the Caspian region said Tuesday.

“The economic situation and low oil prices should allow us to bring the cost down,” Campbell Keir told reporters. “But we’re continuing to invest.”

He said Shell’s annual investment in Kazakhstan was about $900 million.

“You could guess the majority goes to Kashagan,” Keir said.

Shell owns 16.8% in the Kashagan consortium that includes Kazakh state oil and gas company KazMunaiGas, ExxonMobil Corp. (XOM), ConocoPhillips (COP), Eni SpA ( E), Total SA (TOT) and Inpex Corp. (1605.TO).

Keir said the consortium still planned to get first oil at Kashagan, an offshore oil field in the Caspian Sea, in the fourth quarter of 2012.

Kashagan is expected to produce 1.5 million barrels of oil a day by 2019.

Company Web site:

-By Kadyr Toktogulov, Dow Jones Newswires; +7 701 726 4327, [email protected]

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  03-10-09 0712ET
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