Eni loses grip of Kazakh oilfield

Eni, the Italian oil company, is to lose operating control of the giant Kashagan oilfield, the crown jewel of its upstream portfolio, as Kazakhstan asserts greater control over the troubled oil development.

The settlement between an Eni-led oil consortium and Kazakhstan over production delays and ballooning costs at Kashagan, finalised on Sunday night, allows Eni to remain operator of the first, experimental phase of the project scheduled to produce oil in 2011.


But a new operating company representing other shareholders in the Eni consortium, including ExxonMobil, Royal Dutch Shell and Total, will be established to manage all subsequent stages of the development, which is expected eventually to yield more than 1.5m barrels of oil a day.

The new entity will report to a management committee led by KazMunaigas, Kazakhstan’s state oil company.

Maksat Edenov, the first vice-president of KMG, said, “At last Kazakhstan has won recognition and will enjoy equal treatment to other consortium partners. It is up to us to keep up the pace of the development and prove ourselves equal to everyone else.”

FT.com