UPDATE 2-Kazakhstan cuts oil output forecast, blames ENI
(Wraps comments by Nazarbayev, Masimov, adds details)
ASTANA, Oct 12 (Reuters) - Kazakhstan will produce 13 percent less oil than expected by 2015, removing 400,000 barrels per day from forecast global supply, due to delays in launching the massive Kashagan field, government officials said on Friday.
Kazakh President Nursultan Nazarbayev told reporters oil output would reach 130 million tonnes by 2015, down from a previous estimate of 150 million. Output will reach 80 million tonnes in 2010, up from the current 65 million.
"This is all Kashagan. They delayed production (start-up) from 2008 to 2010. Of course we are making adjustments," Kazakh Prime Minister Karim Masimov told reporters, referring to the ENI-led group in charge of developing the project.
Kazakhstan has severely criticised Italian oil group ENI (ENI.MI) and its partners for delays and cost overruns at Kashagan, saying slow development could hamper Kazakhstan's economic growth.
The field was expected to produce more than 50 million tonnes a year, adding to Kazakhstan's existing production of about 65 million tonnes, which comes mainly from two giant oilfields, Tengiz and Karachaganak.
Kazakhstan has threatened to strip ENI of its leading role at Kashagan and give a bigger role to Kazakh state oil company KazMunaiGas [KMG.UL], which has an 8.3 percent stake in the project, but later reassured it would not change the terms.
It has threatened to impose billions of dollars of fines on the consortium after it said development costs had escalated to $136 billion from $57 billion. Talks on disagreements face an Oct. 22 official deadline.
Masimov said the amount of compensation to be paid had yet to be set: "How much this figure is, is a commercial negotiation, but you will hear the news after Oct. 22. That is (the time frame) for peaceful negotiations.
"Plan B will happen if we don't manage to find an agreement on Plan A. It's a specific plan," he said, but gave no details.
Other members of the consortium are Royal Dutch Shell (RDSa.L), Exxon Mobil Corp (XOM.N), Total (TOTF.PA), ConocoPhillips (COP.N) and Japan's Inpex (1605.T).
SOLUTION FOR TENGIZ
Masimov also said a row with the Chevron-led (CVX.N) Tengizchevroil consortium over open-air sulphur storage at the Tengiz oilfield could be solved by Tengizchevroil paying "the Kazakh side" for suitable storage facilities.
Kazakhstan's environmental protection agency has repeatedly sought to fine Tengizchevroil over the storage of the inert yellow chemical, extracted from crude when its high hydrogen sulphide content is removed before transportation. Continued...
