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Kashagan work ‘continuing’

Work on the Kashagan oilfield in Kazakhstan "continues", Paulo Scaroni, chief executive of the fields’ operator Eni, said today.

Kazakhstan, irked by delays and cost overruns at the Caspian Sea development, earlier today demanded a leading role for its state energy company in running the project.

Kazakhstan last month ordered the Eni-led consortium developing the field to suspend Kashagan's operations.

"It's not an on and off thing," Scaroni said on the sidelines of a cultural event. "It's more complicated. You can't close it overnight."

Scaroni, who plans to travel to Kazakhstan to negotiate with the government, declined to give more details about the state of the operations, the talks or when he will go to Kazakhstan.

The company said later that Scaroni had met with Eni board to brief them on activities at the project and relations with Kazakh authorities and the other members ofthe consortium developing the field.

Eni also said Scaroni had briefed directors about his forthcoming trip to discuss the project with Kazakh Prime Minister Karim Masimov. The company said in a statement that Scaroni's visit was at the invitation of Masimov.

Emboldened by high oil prices, resources-rich Kazakhstan has long been mounting pressure on the group of mostly Western oil majors and has recently said it wanted more than $10 billion from them in compensation for Kashagan delays.

Kazakh officials have accused the consortium of a host of violations, from environmental issues to fire safety. Their moves raised concerns about "resource nationalism" and echoed Russia's row with Anglo-Dutch supermajor Shell, who finally ceded a stake in a huge oil and gas project, Sakhalin-2.

Eni, Shell, US supermajor ExxonMobil and Total each hold 18.5% in Kashagan, ConocoPhillips has 9.3% and Japan's Inpex Holdings has 8.3%.

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