Increasing GazMunayGaz’s Share in Kashagan Project May Present Political Obstacles to Project: Expert
Azerbaijan, Baku /corr. Trend A. Badalova / Increasing the participation share of Kazakhstan State Company GazMunayGaz in the development project of Kashagan field may present political obstacles to the project, said oil and gas analyst of Alfa Bank, Constantine Batunin.
"Increasing the share of Kashagan will not directly affect the acceleration of oil production from Kashagan. But just the opposite, it will impose political and other obstacles to the project," the analyst remarked.
The authorized organization for developing the project of Kashagan and its participants signed a Memorandum of Understanding as a result of talks within the Production Sharing Agreement. The participants reached an agreement to discuss the increase of GazMunayGaz's share in the project, which currently equals 8.33%. Several sources state that the share may be increased up to 17%.
Batunin considers that Kazakhstan will not take any measures to accelerate the realization of the project.
Oil production from the field has been scheduled to begin in 2010. Part of the oil will be exported via the Baku-Tbilisi-Ceyhan pipeline.
"Despite this, there are some difficulties, but the project is being technically developed. Kazakhstan was able to overcome its obstacles and there will be no measures from the Kazakh side for accelerating oil production from the field," the analyst said.
Participants of the Agip KCO consortium, who are developing the project, include Italian ENI (operator of the project), French Total, ExxonMobil, Royal Dutch/Shell, ConocoPhillips, Inpex, and GazMunayGaz. Earlier, Kazakhstan stated that GazMunayGaz intends to become a collaborator on the project.
The available oil reserves of Kashagan are assessed at being at least 7-9bln barrels and the common geological oil reserves of the field at 38bln barrels. Beginning oil production from the field was postponed from the second half of 2008 to the second half of 2010.