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Kazakhstan’s president Nursultan Nazarbayev has expressed concern about the development of the Kashagan oil and gas field during his meeting with the CEO of Italian Eni Claudio Descalzi, Tengrinews reports citing the official website of the President. The meeting took place as part of the Foreign Investors' Council in Borovoe resort on June 11.
The President expressed concern about the course of implementation of the project of development of Kashagan oil and gas field, the project marred by multiple delays and cost overruns during its whole lifetime.
“Our meeting takes place on the eve of the working visit of Italy’s Prime Minister Matteo Renzi. Relations between our countries have always been very good. Eni has been working in Kazakhstan for over 20 years, and the North-Caspian project [Kashagan] is the most important area of our cooperation. I am confident that despite all the difficulties we will be able to continue accomplishing our goals,” President Nazarbayev said.
They also discussed expansion of oil transportation network in Kazakhstan, Eni's role in other oil and gas projects in Kazakhstan, namely, in production at the Karachaganak gas field in Western Kazakhstan Oblast, and the Italian company's cooperation with KazMunaiGas, Kazakhstan's national oil and gas company.
In the end of the meeting, the president congratulated Descalzi, who assumed his current position only in May this year, and wished him success.
Kashagan is a gigantic oil field in Kazakhstan’s section of the Caspian Sea. It is one of the largest oil discoveries of the past three decades. Many transnational companies, including Italian Eni, American Exxon and Anglo-Dutch Shell are involved in the development of the field.
Oil production started on 11 September 2013, but less than two weeks later a leak was discovered and the production was halted. IT resumed on 6 October, but another leak was discovered on 9 October. Corrosion driven by high content of toxic hydrogen sulfide was declared the cause of the leaks.
Kashagan production has been shut down for an unspecified period of time until the pipes are replaced with those made from a more resistant alloy. The replacement of the pipes and the production downtime will cost billions of dollars.
Kazakhstan’s Minister of Oil and Gas Uzakbai Karabalin announced the government was unhappy with the performance and that the project would get a new operator in September 2014.
Writing by Dinara Urazova, editing by Tatyana Kuzmina
