By Dmitry Solovyov
ALMATY, March 18 A consortium developing
Kazakhstan's huge Kashagan oilfield said it had appealed a 134.2
billion tenge ($737 million) fine by a regional Kazakh authority
for ecological damage at the site in the Caspian Sea.
The fine adds to the woes of the multinational group, which
has already spent about $50 billion after numerous delays.
Kashagan, the world's biggest oil find in 35 years, launched
operations in September 2013 after 13 years of development.
Output was then halted in October after gas leaks were detected
in the group's pipeline network.
While output was stopped, residual sour gas was burnt in
flares at the project's processing plants, polluting the
environment, Kazakhstan's Environment Protection Ministry said
"We ... appealed the ecological fines," an official for the
North Caspian Operating Company (NCOC), the venture developing
the oilfield, said on Tuesday.
The appeal was filed at the regional environmental
department of the Atyrau Region in western Kazakhstan, where
Kashagan is located.
"Whether we appeal also at national level will be decided at
a later stage," the NCOC official said.
Checks showed that the volume of gas flared last September
and October was 2.8 million cubic metres, exceeding legal
limits, the ministry said at the time.
The consortium, led by Exxon Mobil, Royal Dutch
Shell, Total, Eni and Kazakh state
oil firm KazMunaiGas, also faces a bigger risk that
Kazakhstan could seize a bigger stake in Kashagan or refuse to
reimburse a big chunk of the money spent to bring it on stream.
Before the gas leaks brought Kashagan output to a halt, the
consortium had failed to achieve so-called "commercial output"
at the field by Oct. 1 as stipulated in its contract.
This means NCOC members will not be reimbursed for costs
between then and the date when they finally achieve commercial
output, KazMunaiGas head Sauat Mynbayev said this month.
Other NCOC members include Japan's Inpex with 7.56
percent and China National Petroleum Corp (CNPC) with
8.33 percent, which it bought from ConocoPhillips last