Kazakh Kashagan might start oil production in 2014
ASTANA (Reuters) - Commercial production at Kazakhstan's giant Kashagan oil field is expected to start later than the agreed 2013 launch date, a Kazakh oil industry official said on Thursday.
Tumir Kulibayev, head of the influential KazEnergy association whose members include major Kazakh oil companies including state-owned KazMunaiGas, said the delay would be technical and would not mean a breach of the contract.
"They are talking about October 2013, but it would be impossible to launch (the production) during the winter so it will be 2014," Kulibayev told an energy conference.
In June, Kazakhstan and the group of oil majors developing the field agreed to hold off the start of production until 2013 after a year of tension over the world's biggest oil discovery in 30 years.
"We (Kazakhstan) are actually saying that by the end 2013 all the facilities must be ready," Kulibayev, who is also a son-in-law of Kazakh President Nursultan Nazarbayev, said.
As part of the same deal, due to be finalized by October 25, the consortium agreed to prevent further cost overruns, pay floating royalties linked to the oil price and have the PSA expire in 2041.
The consortium comprises Eni, Royal Dutch Shell Plc, Exxon Mobil Corp, Total, ConocoPhillips, KazMunaiGas and Japan's Inpex Holdings Inc.
Kulibayevalso said Kashagan would produce 450,000 barrels per day in 2014.
The Caspian oil field, discovered in 2000, was initially scheduled to start commercial production in 2005. But the consortium and the government agreed to move the launch to 2008 and then 2010 due to technical difficulties.
Kashagan oil has high sulphur content and the field lies in shallow waters that freeze in winter.
It is not the only large oil project suffering delays. Russia's Rosneft said on Wednesday it would put off the launch of its Vankor field citing the need to bring in more equipment to the Arctic field.
(Reporting by Raushan Nurshayeva; Writing by Olzhas Auyezov; editing by Rory Channing)
