KazMunaiGaz to invest $2.3b in Kashagan

Almaty: KazMunaiGaz National, Kazakhstan's state-run oil company, will invest 280 billion tenge ($2.3 billion) in the development of the Eni-led Kashagan offshore field this year, after doubling its stake in 2008.

The company's total investments may be five billion tenge less than the planned 696 billion tenge, given an oil price of $40 a barrel, chief executive Kairgeldy Kabyldin told Prime Minister Karim Masimov in Astana, according to a statement posted on the government's website.

KazMunaiGaz increased its interest in Kashagan to 16.81 per cent last year, equal with ENI and partners ExxonMobil, Royal Dutch Shell and Total following cost overruns and delays to the start of production. The Caspian Sea deposit has about 13 billion barrels of oil equivalent recoverable reserves.

The budget for Kashagan's experimental phase has risen to $36 billion from a government estimate of $27 billion a year earlier, Energy Minister Sauat Mynbayev said on September 5. The experimental period covers exploration and development through the start of production, which Mynbayev said is on target to meet an October 2013 deadline.