Eni: Kashagan Incurred Aggregate Costs Of $4.5 Billion As Of End ’09
April 7. Dow Jones. ROME
Eni SpA said it incurred aggregate costs of $4.5 billion as of the end of last year for the massive Kashagan oil project in Kazakhstan, adding further amounts are needed to build related export infrastructure.
The $4.5 billion amount is made up of $3.4 billion expenditure Eni incurred for the development of the oil field and $1.1 billion for the acquisition of interests of partners that have exited the Kashagan consortium, said the Italian company in its 2009 annual report, published on its Web site.
In addition to costs for developing the field, “further capital expenditure will be required to build the infrastructure needed for exporting production to international markets,” wrote Eni in its 2009 annual report.
The phase 1 budget of Kashagan amounts to $32.2 billion, when excluding general and administrative expenses, said the Rome-based company in its 2009 report.
The Kashagan consortium, which includes KazMunaiGas and major international oil companies ExxonMobil Corp. (XOM), ConocoPhillips (COP), Royal Dutch Shell PLC (RDSB.LN), Japan’s Inpex Corp. (1605.TO) and Total SA (TOT), as well as Eni, is slated to start commercial production by the end of 2012.
Eni said it expects daily output of 370,000 barrels in 2014. The field is estimated to reach a daily plateau production of 1.5 million barrels, making it one of the world’s biggest.
Phase 2 of the project is at the Front End Engineering Design, of FEED, stage, said Eni. FEED is the process for conceptual development of processing industry projects.