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Eni forced to cease exploitation of Kazakh oil fields

Kazakhstan closed the country’s oil fields to production by the Italian energy firm Eni S.p.A. due to a breach of environmental obligations, Environment Minister Nurlan Iskakov said in the capital Astana on Monday.

According to the Interfax news agency, the Kazakh government has forced a three-month pause on the Kashagan project. Iskakov had previously warned that the country was legally obliged to withdraw the company’s development license to the Kashagan deposits in order to prevent irreparable damage to the environment.

Eni S.p.A. leads an international consortium of oil producers that includes Total, ExxonMobil and Royal Dutch/Shell each with 18.52% stake, ConocoPhillips with 9.26%, and Inpex and the state-owned Kazakh firm KazMunaiGaz with 8.33% each. Eni had postponed the oil development originally planned for 2005 several times, with project costs rising from 57 billion to $136 billion.

Kazakhstan’s Economic Minister Bachyt Sultanov claimed that the postponements had cost the state “a substantial sum.” The Kashagan field in the Kazakh sector of the Caspian Sea contains potentially up to 38 billion barrels of oil, with experts estimating that the firm could reasonably produce about 9 billion barrels. (monstersandcritics.com)