News 2013#3 (75), June 2012
Kazakhstanand the contract companies of the North Caspian project signed an agreement under which the commercial production of oil from the Kashagan field on the Caspian Sea shelf will occur in the period from December 2012 to June 2013, informed the press-service of the Ministry of Oil and Gas of Kazakhstan.
According to the press-service, the agreement on the settlement of certain issues of the North Caspian project was signed in Astana by the government of the Republic of Kazakhstan and the contract companies of the North Caspian project. “In accordance with the reached agreements, the sides approve the amendment to the plan and budget of Kashagan’s development which will make it possible to start the Kashagan’s commercial production in the period from December 2012 to June 2013,” it is said in the message.
Within the agreement’s settlement, the parties agreed to finance, at the consortium’s means, a share of investments of KazMunayGas in the project for 2012-2013; to sign a long-term agreement between KazTransGas and the contract companies on the sale of the Kashagan gas providing delivery of up to 83 % of this volume of gas to the home market through 2041; and not to compensate certain part of expenses borne by the contractor.
In addition, the republic and contract companies reached certain arrangements directed at achieving “maximum clearness in such issues as taxation and reimbursement of expenses”. Among the contract organizations which signed the agreements are КМG Kashagan B.V., Agip Caspian Sea B.V., ExxonMobil Kazakhstan Inc., Shell Kazakhstan Development B.V., Тоtal E&P Kazakhstan, ConocoPhillips North Caspian Ltd. and Inpex North Caspian Sea Ltd.
The terms of the start of oil production at Kashagan were transferred for several times. The consortium of foreign companies led by Italian Eni initially promised to provide commercial production in 2008. According to КМG, the company plans to invest $8 billion in the Kashagan project through 2014 under the company’s total amount of investments of $20 billion in various projects in the same period. In the process of coordination of the terms of commercial production, Kazakhstan has increased its share in the project from 8 % to 16.8 % and gained the payment of royalty which was absent in the initial agreement. In late June 2008 one more memorandum was signed under which the terms of commercial oil production from the Kashagan field on the Caspian Sea shelf were transferred for the year 2013.