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Management changing for giant Kashagan oil field

No validity to earlier reports on management overhaul, North Caspian Operating Co. says.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   June 10, 2014 at 9:30 AM
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ASTANA, Kazakhstan, June 10 (UPI) -- The Caspian company in control of the Kashagan oil field offshore Kazakhstan said it would change the corporate structure managing the troubled reserve area.

Last week, a publication from Nefte Compass said U.S. energy company Exxon Mobil would take over as the operator at Kashagan from Italian energy company Eni. The Platts energy news website published a statement from the North Caspian Operating Co. denying the report, saying instead the company was overhauling its management structure.

"No changes to the [production sharing agreement] and/or the [North Caspian Sea] PSA ownership structure are envisioned as a result of the planned transition," the statement read. "The new company will operate under a single corporate management system, which integrates existing processes and tools from venture entities."

Kashagan is one of the largest oil fields in the world, with an estimated 16 billion barrels of oil reserves. Production was halted in October, less than a month after it started, when a pipeline associated with the field cracked open.

In an April report, the Organization of Petroleum Exporting Countries said final results from pipeline inspections aren't due until second quarter 2014, though the project has already consumed substantial investments.

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