No go: at Kashagan
Astana calls halt at Kashagan
Kazakhstan has suspended work at the Kashagan development for at least three months due to environmental violations, with the country's Finance Ministry later saying it has opened a criminal investigation into the development's operators over alleged customs violations and the Emergency Ministry also starting legal action over alleged breaches of fire safety rules.
The Kazakh Finance Ministry claimed a unit of the Eni-led group developing Kashagan breached customs rules over the import of two helicopters. It named the unit as Agip Kazakhstan North Caspian Operating Company.
"The committee ... has also uncovered other serious violations of Kazakh legislation in connection to (Eni-led consortium) AgipKCO branch's use of the country's customs regime, including towards this company's subcontractors," Reuters quoted a press release as saying.
The Emergency Ministry said it was suing operator AgipKCO over violations of fire safety rules and will seek to halt construction of an oil and gas processing facility there.
"Over the next three days ... we will demand in court that this project be suspended," Sergei Dyrin, a senior Emergency Ministry official, told Reuters.
"We have uncovered serious violations of fire safety rules there."
Meanwhile, Ecology Minister Nurlan Iskakov told Reuters this morning: "The permit for 2007 has been suspended. That is, we are suspending work for three months on our part.
"We have contacted the Energy Ministry for it to take action as the authorised body within the contract's framework."
The announcement came days after Kazakhstan threatened to revoke the Eni-led consortium's permit to exploit the giant offshore oilfield.
On Friday Eni boss Paolo Scaroni said his company and its partners had 60 days to reach a negotiated solution for the Kashagan project.
Kazakh officials have said the consortium had breached Kazakhstan's environmental laws while developing the oilfield.
Kashagan's AgipKCO consortium also includes Shell, ExxonMobil, Total, ConocoPhillips, Japan's Inpex and the Kazakhstan's state-run producer KazMunaiGaz.
The consortium has pushed back first oil from the field to the second half of 2010 from an original target of 2005.
Industry sources in Kazakhstan told Reuters some in the government are unhappy with what are now seen as overly generous terms signed with foreign companies in the 1990s, when Kazakhstan needed foreign investment to overcome a post-Soviet slump.
Meanwhile, an Eni spokeswoman said that representatives from AgipKCO will meet local authorities later today.
"In recent days we received a letter of an amicable nature about the (oilfield) contract," she said.
"Today consortium representatives will meet local authorities in Astana (in Kazakhstan) to analyse the situation."