Eni, Partners to Reduce Kashagan Oil Field Costs by $1 Billion

July 3. Bloomberg

By Nariman Gizitdinov

Eni SpA, Exxon Mobil Corp. and other oil companies developing the Kashagan project will cut costs at Kazakhstan’s biggest oil field by $1 billion, the country’s energy minister said.

The partners agreed to reduce the field’s budget for development before initial production in 2012 from $32 billion, Sauat Mynbayev said in Astana today, according to his spokesman, Ayan Atygayev.

Kazakhstan’s state-run KazMunaiGaz National Co. said yesterday that the partners aimed to cut costs at Kashagan because of the “significant impact” of the global economic crisis.

KazMunaiGaz increased its interest in Kashagan to 16.81 percent last year, equal with Eni and partners Exxon, Royal Dutch Shell Plc and Total SA following cost overruns and delays to the start of production. ConocoPhillips and Inpex Holdings Inc. also have interests.