Kashagan field start-up delayed to 2014

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Sept. 4 -- Kazakhstan's Kashagan oil field, long the subject of uncertainty over a start-up date, will begin producing crude in 2014 instead of in 2013, according to the head of a Kazakh energy association.

Timur Kulibayev, chairman of KazEnergy—an association of major oil and gas companies in Kazakhstan—told reporters at a conference that it would be "impossible" to launch Kashagan's oil production by the planned date.

Kulibayev, who also is a son-in-law of Kazakhstan's President Nursultan Nazarbayev, said severe winter weather conditions would prevent the start-up envisioned by the Agip Kazakhstan North Caspian Operating Co. (Agip KCO).

Kulibayev's remarks contradicted a statement by Kairgeldy Kabyldin, chief executive of state-owned KazMunaiGas, a consortium member, that production was expected to begin in October 2013, according to a memorandum signed in June by the government of Kazakhstan and the Agip KCO consortium.

Kabyldin, in attendance at the same conference, did not comment on Kulibayev's statement.

The remarks by Kulibayev will doubtlessly stir controversy over the project as the Agip KCO consortium has faced repeated delays in its projected startup, initially set for 2005, later pushed back to 2008, 2010-11, and 2013, due to rising costs and reported difficulties.

Kulibayev's remarks also come just ahead of the Oct. 25 negotiating deadline for the Kashagan development set by the Kazakh government and reaffirmed Aug. 29 by Kazakh Prime Minister Karim Masimov.

The Agip KCO consortium is comprised of Eni, Total, ExxonMobil, and Royal Dutch/Shell, each of which holds an 18.52% stake, ConocoPhillips with 9.26%, and Inpex and KazMunaiGaz each with 8.33%.

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