Kashagan oil field development delayed

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ASTANA, Kazakhstan, Oct. 28 (UPI) -- The energy minister of Kazakhstan said Tuesday production at the Kashagan oil field in the Caspian Sea has been delayed two years to 2013.

The offshore Kashagan oil field, discovered in 2000, holds an estimated 12.5 billion barrels of oil. Production was delayed several times as consortium majors ExxonMobil, Royal Dutch Shell and Total said high costs and technical difficulties created problems moving forward.

The Kazakh government in January reached an agreement with the seven companies operating under the North Caspian Sea Production Sharing Agreement, the Kashagan consortium, to increase its stake in the project from 8 percent to 16.8 percent to match majority shareholders.

That deal was seen as a breakthrough on development, but under the agreement reached Tuesday production was postponed to at least 2013, RIA Novosti said Tuesday.

"We have agreed on all the issues, and hope to sign (an agreement) at the end of the week," said Sauat Mynbayev, the Kazakh minister of energy and mineral resources.

The foreign majors under the agreement will bear any extra development costs for the field.