KazMunaiGas and Shell Team Up For Kashagan Oil

According to Reuters, Kazakh state oil company KazMunaiGas will create a joint venture with Royal Dutch Shell to handle the production segment of the Kashagan oilfield.  As noted in the article:

“…Energy Minister Sauat Mynbayev said KazMunaiGas would take over production-related operations at Kashagan in five years and join its new operational structure, according to the government.

KazMunaiGas said earlier this year that Western companies developing the Kashagan oilfield would all get new roles after the completion of the project’s initial development stage.

Kazakhstan and a group of global oil majors, at odds over Kashagan’s production schedule and costs, are due to finalise details of the project’s future development by Oct. 25.

KazMunaiGas is at the centre of state plans to exert more control over its resources following the first post-Soviet decade when Kazakhstan, its economy in tatters, lured foreign investors with tax breaks and sky-high returns.

…Apart from Shell and KazMunaiGas, the consortium unites Eni, Exxon Mobil Corp, Total, ConocoPhillips, and Japan’s Inpex Holdings Inc.

Eni said this week it plans to start production at the Kashagan field in 2012, adding it was aiming for production of 150,000 barrels per day (bpd) from the fourth quarter of 2012.

Under an earlier deal, KazMunaiGas is to double its stake to 16.81 percent in Kashagan for $1.78 billion, with other shareholders agreeing to cut their stakes on a pro-rata basis.

The stand-off over Kashagan started in August 2007 when the government accused its shareholders of allowing costs to spiral to $136 billion from $57 billion, and missing the original 2005 production start target.

Mynbayev announced the move after a meeting with senior Eni officials and financial institutions in the western oil region of Atyrau where Kashagan is located.”



This entry was posted on Monday, September 22nd, 2008 at 5:53 am and is filed under Kazakhstan, KazMunaiGas, Total.  You can follow any responses to this entry through the RSS 2.0 feed.  You can leave a response, or trackback from your own site. 

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Wildcats & Black Sheep is a personal interest blog dedicated to the identification and evaluation of maverick investment opportunities arising in frontier - and, what some may consider to be, “rogue” or “black sheep” - markets around the world.

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