* Delayed probe results cloud oil output prospects in 2014
* Kashagan crucial for Kazakhstan's growth, prosperity
* Kashagan faces big ecological damage fine
(Adds background, detail on investor-state relations, technical
By Dmitry Solovyov and Mariya Gordeyeva
ALMATY, March 27 A consortium developing
Kazakhstan's $50 billion Kashagan oilfield said the result of a
probe into a toxic gas leak there was now expected in the second
quarter, extending the closure of one of the world's biggest oil
"The results of these investigations are expected in
March/June 2014," a consortium spokesman said in written
comments to Reuters, putting back an original February or March
It remained unclear when crude output would restart after
the project was halted by sour gas leaks shortly after start-up
in September, but the delay was likely to unsettle further
Kazakh authorities who have already sued the consortium for 134
billion tenge ($737 million) for ecological damage.
Kazakhstan, Central Asia's largest economy and the
second-largest post-Soviet oil producer after Russia, is pinning
hopes for future prosperity on Kashagan whose recoverable
reserves are estimated at 9 billion to 13 billion barrels of
The consortium said last week it would challenge the fine,
potentially raising tensions with a government, which in recent
years has become more assertive dealing with foreign investors
and has used legal action as leverage to increase participation
in some large-scale energy projects.
Production at the Caspian Sea field, the world's biggest
oil find in 35 years, was halted in early October after gas
leaks were detected in its pipeline network.
The North Caspian Operating Company (NCOC) consortium, led
by Exxon Mobil, Royal Dutch Shell, Total
, Eni and Kazakh state oil firm KazMunaiGas
, had to achieve a "commercial output" level of 75,000
barrels per day in October to meet its contractual obligations.
But when the field resumed operations after the first
accident in September, it was producing 61,000 bpd, Sauat
Mynbayev, head of Kazakh state oil and gas firm KazMunaiGas,
said at the time.
RESULTS IN MAY?
A Kazakh government source told Reuters separately that the
authorities did not expect investigation results earlier than
May. "We have received the readings, but we now need time to
decipher them," said the official who asked not be named.
The NCOC on Thursday reiterated an earlier statement
identifying sulphur stress cracking as "the root cause of the
pipeline issues" at Kashagan.
"This process occurs if steel of high hardness is exposed to
high concentrations of H2S (hydrogen sulphide) under high
pressure in the presence of water," the NCOC spokesman wrote.
"This mechanism is not at all related to normal corrosion
(formation of rust) but solely to the hardness of the steel."
Much of Kashagan is built on artificial islands to avoid
damage from pack ice in a shallow Caspian sea that freezes for
five months a year in temperatures that drop below minus 30
degrees Celsius (-22F).
Before the gas leaks brought Kashagan output to a halt, the
consortium had failed to achieve the commercial output levels 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.
NCOC also includes Japan's Inpex with 7.56 percent
and China National Petroleum Corp (CNPC) with 8.33
percent, which it bought from ConocoPhillips last year.
During Kashagan's development, NCOC had originally planned
to gradually increase output to 370,000 barrels per day in the
second stage from 180,000 bpd in the first stage in 2013-14.
(Additional reporting by Oleg Vukmanovic in London; Editing by
William Hardy and Keiron Henderson)