UPDATE 1-Kashagan development cost to be cut by $1 bln
* Initial $32 bln phase cost to be cut by $1 bln (Adds details, background)
ASTANA, July 3 (Reuters) - The cost of developing Kazakhstan's huge Kashagan oilfield will be cut by at least $1 billion as the global crisis drives down machinery prices, Kazakh Energy Minister Sauat Mynbayev said on Friday.
The oilfield, in the north-east of the Caspian Sea, is due to come onstream in 2012. Kazakhstan's government had earlier estimated its total cost at $136 billion.
"The (Kashagan) managing committee has adjusted the budget ... due to the current price dynamics for equipment and other items," Mynbayev told reporters.
Mynbayev said the $1 billion cut was related to the project's $32 billion initial phase, due to last until 2012.
Kashagan is run by Eni (ENI.MI), Royal Dutch Shell Plc (RDSa.L), Exxon Mobil Corp (XOM.N), Total (TOTF.PA), ConocoPhillips (COP.N), Kazakh state oil company KazMunaiGas [KMG.UL] and Japan's Inpex Holdings Inc (1605.T).
KazMunaiGas and the foreign firms said earlier this week the global economic crisis could drive down the project costs. (Reporting by Raushan Nurshayeva; Writing by Olzhas Auyezov; Editing by Ben Tan)
