IP/08/53
Brussels, 16 January 2008
Energy Commissioner Andris Piebalgs welcomes the resolution of the Kashagan oil field dispute Energy Commissioner, Andris Piebalgs, has welcomed today the fact that an agreement has been reached between the members of the Kashagan consortium and the authorities of Kazakhstan. The resolution of this dispute will allow the development of the Kashagan oil field, the largest oil discovery in more than 30 years, to proceed at the quickest pace possible (with the production stream to come on line by 2011). Such progress should also help to ease world energy markets at a time of sharply increasing energy demand. Background:
The Memorandum of Understanding signed in Astana on 14 January 2008 brings an end to a six-month standoff between the members of the Kashagan consortium which includes ENI, Exxon Mobil, Total, Royal Dutch Shell, Inpex and ConocoPhillips and the authorities of Kazakhstan. Discovered in 2000, it is the largest oil field discovered in the North Caspian Sea and is situated close to the Kazak city of Atyrau. The dispute has emerged due to the concerns raised by the Republic of Kazakhstan on the impact of certain factors that have influenced the speed and cost of the project development. Indeed, Kashagan represents a significant technical and environmental challenge due to the high sulphur content with associated production of hydrogen sulphide gas, wide temperature variations from –40 to +40C and a deep, high-pressure reservoir.
