Kashagan May Delay Oil Again, Presidential Aide Says

By Nariman Gizitdinov and Adam L. Freeman

Sept. 4 (Bloomberg) -- Production at the Eni SpA-led Kashagan oil project in Kazakhstan may be delayed until 2014, almost a decade behind the original start date, an aide to the Central Asian nation's president said.

Difficult technical conditions for drilling and shipments mean the field may come on stream a year later than the current target of 2013, Nurlan Balgimbayev, an adviser to President Nursultan Nazarbayev, told reporters on the sidelines of an energy conference in the capital, Astana, today.

Production is scheduled to begin in 2013, already eight years behind the original start-up date of 2005, after state-run KazMunaiGaz National Co. took a greater share in the project in January. By the end of 2013 all facilities must be ready and transportation issues resolved, Timur Kulibayev, chairman of the KazEnergy association, told a press conference.

The venture ``will not be able to produce oil in winter, so the start date will be 2014,'' said Kulibayev, whose group unites producers in Kazakhstan including Chevron Corp. and BG Group Plc. ``The point is to make the project work in time as the more we delay the start to production, the higher the costs are.''

The venture, whose partners also include Exxon Mobil Corp., Royal Dutch Shell Plc and Total SA, should produce 450,000 barrels a day in 2014, said Kulibayev, who is married to Nazarbayev's daughter. Eni earlier estimated output reaching 370,000 barrels of oil a day in the year after the start to production, before rising to a peak of about 1.5 million barrels a day.

An Eni official declined to comment when contacted by Bloomberg News today. Total spokesman Kevin Church said he couldn't provide immediate comment.

Under terms of the deal struck earlier this year, Kashagan partners are slated to run the field jointly with current sole operator Eni when oil starts flowing.

To contact the reporters on this story: Nariman Gizitdinov in Almaty, through the Moscow newsroom at ngizitdinov@bloomberg.net; Adam L. Freeman in Rome at afreeman5@bloomberg.net