Companies in a consortium developing Kazakhstan 's Kashagan oil field plan to add extra staff to work on the project, after signing a new accord that pushes back the production start date to 2013 from 2011, a spokeswoman for Total SA (TOT), a member of the consortium, said Sunday.
The consortium will sign a "definitive agreement" by the end of 2008, the spokeswoman said, adding that the new agreement adds more details to agreements reached last December and January.
The companies in the consortium are sending additional teams to Kazakhstan to work on the project, the Total spokeswoman said.
Italy's Eni SpA (E) is the operator of the Kashagan project. In addition to Eni and Total, other consortium members are Exxon Mobil Corp. (XOM), Royal Dutch Shell PLC (RDSB), Conoco Phillips (COP), Japan's Inpex Holdings (1605.TO) and Kazakh state oil and gas company KazMunaiGas.
Kashagan is estimated to hold recoverable reserves of 13 billion barrels of oil. The project, located in the landlocked Caspian Sea, was billed as the largest oil discovery in around 30 years when it was found at the end of the 1990s.
The new production deadline is the fourth one, with the previous 2011 date set just six months ago. The project was originally expected to start commercial service in 2005.
Kazakh state oil and gas company KazMunaiGas said in a statement Saturday that the consortium has reached agreement with the Kazakh government on a detailed memorandum of understanding which "expands considerably the agreements reached last December and January and paves the way for proceeding with the development project."
"In addition to the important adjustments to the economic terms, the new agreement also provides the Republic of Kazakhstan with substantial assurances that the project will be implemented in accordance with the approved schedule," KazMunaiGas said.
Kazakhstan and the consortium have been in a dispute over repeated delays in production and cost overruns. The proposed costs have run up to $136 billion from $57 billion.
The consortium reached an agreement in January to compensate the government for cost overruns and production delays after six months of talks.
The partners also agreed to sell part of their Kashagan stakes to KazMunaiGas, giving the Kazakh state oil company a 16.81% stake in the project, equal to the largest consortium members, and to make additional payments to the Kazakh government based on the price of oil. Crude prices then were around half the current record-high levels.