Kazakhstan's national oil company is investigating the activities of an international consortium led by Italy's Eni SpA due to delays in the launch of commercial extraction at a giant oil field, KazMunaiGaz's chairman said Wednesday.
"We have serious complaints to the contractor in connection with a serious increase of costs and shifts in the production schedule," the state news agency
Kazinform quoted Uzakbai Karabalin as saying.
Last year, the oil-rich Central Asian country downgraded its long-term oil output forecast from 3 million to 2.6 million barrels a day by 2015 because of delays with development of Caspian Sea fields.
The Eni-led consortium originally aimed to begin production at the Kashagan field in 2005, but has pushed the date back to 2009-2010, citing technological difficulties. Eni decline to comment on the report.
The field in the northern part of the Caspian, the world's last biggest oil discovery in the past 30 years, is expected to play a crucial role in filling a pipeline completed in 2005 and designed to carry Kazakh oil to energy-hungry China.
Last week, Prime Minister Karim Masimov ordered the government to tighten control over activities of foreign oil companies, criticizing them for "extensions of the prospecting period, delays with the start of commercial extraction and raising costs."
The ex-Soviet republic's government has also been concerned about the rising costs of a project to develop the giant Karachaganak gas field that is operated by another international consortium led by Britain's BG Group PLC and Eni.
Under contracts covering Kashagan and Karachaganak, the Kazakh government begins to get its share of revenues only after investors recoup their developing costs.
In the past few years, Kazakhstan has been pursuing a policy to increase state assets in its vast energy sector that is currently dominated by Western investors.
(AFX News, 24/01/2007)