Eni to remain Kashagan operator till commencement of commercial production
Madrid. July 1. Interfax-API – Italian Eni SpA will remain the operator of the Kashagan project in the North Caspian Sea till the commencement of commercial production in 2013, Total CEO Christophe de Margerie told Bloomberg in an interview.
He said that the investors of Agip KCO international consortium should approve the new production sharing agreement on Kashagan before October 15 this year.
Under PSA Agip KCO should have started the commercial production at this field back in 2005. However, this date turned out to be unrealistic and was later changed to 2008. In mid-summer 2007 Agip KCO again notified the Kazakh government of its decision to further postpone the commencement of commercial production at Kashagan till the second half of 2010. Besides, AGIP announced an increase in the expenditures from $57 billion to $136 billion.
The Kazakh side was not satisfied with the longer duration of the project and insisted that its national company KazMunayGas was made a big shareholder of the project.
According to the agreement of January 14 signed by Agip KCO participants and the Kazakh government, KazMunayGas’s share in the Kashagan project was increased to 16.81% and the government paid $1.7 billion for it. The other big shareholders in the project are Eni (the current operator), Total, ExxonMobil and Shell. The parties agreed then to create a new company to become an operator of the Kashagan project.
Later Agip KCO participants asked to postpone the commercial production at Kashagan till 2012-2013. As expected, the Energy Ministry finished the talks before June 30.
Today Agip KCO is owned by Eni (the single operator of the North-Caspian Project), Total, ExxonMobil, Royal Dutch/Shell which have 18.52% each, ConocoPhillips - 9.26%, Inpex and KazMunayGas - 8.33% each.
AGIP KCO was created to implement the North-Caspian project after a respective production sharing agreement (PSA) for the period of 40 years was signed in 1997.
Under PSA the licensed area will also include the three oil-bearing structures Kalamkas, Aktoty, Kairan in addition to Kashagan. These 4 structures consist of 11 marine blocks, which occupy an area of about 5,600 square kilometers.
According to Agip KCO the recoverable oil reserves at Kashagan are estimated at a minimum of 7-9 billion barrels and the total oil in-place - at 38 billion barrels.