Contracts with foreign extraction companies shall be respected by both sides

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Contracts with foreign extraction companies shall be respected by both sides

This had been suggestion put forward by Agip KCO, the project operator. The delay has been decided following “revision and reconfiguration of the project with a view of ensuring safety of the technological process and the workers’ safety”, the Minister elaborated.

Start of production at Kashagan has been delayed from H2 2008 to H2 2010, announced Kazakh Energy Minister Baktykozha Izmukhambetov at a government sitting.

This had been suggestion put forward by Agip KCO, the project operator. The delay has been decided following “revision and reconfiguration of the project with a view of ensuring safety of the technological process and the workers’ safety”, the Minister elaborated.

According to him, given the changes in the timeline, costs of the project will rise from USD 56 billion to USD 136 billion. The Kazakh Energy Ministry is to hold talks with Agip KCO in August. The Kazakh side plans to increase its share of profitoil from 10% to 40%. Kazakh Prime Minister Karim Massimov warned Agip KCO through a statement for the media that any change of the time schedule to start production at Kashagan is equivalent to a contract breach. Therefore the Kazakh Government will respond adequately. “Kazakhstan has been and remains committed to inviolability of contracts, and the contract should be respected by both sides in parallel”, he emphasized.

“Kashagan is an unparalleled project not only for Kazakhstan, but for the entire world in terms of production output, anticipated results, and environment requirements (as it will be implemented in a sensitive environment). There has been no such projects developed earlier; and we need to bear this situation in mind when carrying out further work”, Energy Minister Izmukhambetov said. He assured that the Government would take measures in line with the law.

Kazinform