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UPDATE 1-Kazakhstan wants to cut Kashagan cost by 30 pct
July 10, 2009 / 6:19 AM / 8 years ago

UPDATE 1-Kazakhstan wants to cut Kashagan cost by 30 pct

* Kazakh govt’s earlier cost estimate $136 bln

* Talks planned with contractors, suppliers on cost cuts (Adds details, background)

BAISERKE, Kazakhstan, July 10 (Reuters) - Kazakhstan wants to reduce the cost of developing its giant Kashagan oilfield by 30 percent, the chief executive of Kazakh state oil company KazMunaiGas [KMG.UL] said on Friday.

The oilfield, in the northeast of the Caspian Sea, is due to come on stream in 2012. Kazakhstan’s government had earlier estimated its total cost at $136 billion.

“Thirty percent would be great,” KazMunaiGas President and Chief Executive Kairgeldy Kabyldin told reporters. “I can say that this is our position.”

He did not provide any other figures.

“We need to talk to contractors, suppliers to cut (costs),” Kabyldin said. “I think this 30 percent (target) is achievable.”

Kashagan is run by Eni (ENI.MI), Royal Dutch Shell Plc (RDSa.L), Exxon Mobil Corp (XOM.N), Total (TOTF.PA), ConocoPhillips (COP.N), KazMunaiGas [KMG.UL] and Japan’s Inpex Holdings Inc (1605.T).

KazMunaiGas and the foreign firms said this month the global economic crisis could drive down the cost of the project.

Kazakh Energy Minister Sauat Mynbayev has since said that the $32 billion cost of the initial development phase would be cut by $1 billion. (Reporting by Masha Gordeyeva; Writing by Olzhas Auyezov; Editing by Ben Tan)

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