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Giant oil field in Kazakhstan moving forward

By Daniel J. Graeber
Italian energy company Eni committed to moving forward with developments at Kashagan oil field, one of the largest in the world. (Photo: North Caspian Operating Co.)
Italian energy company Eni committed to moving forward with developments at Kashagan oil field, one of the largest in the world. (Photo: North Caspian Operating Co.)

ASTANA, Kazakhstan, Dec. 22 (UPI) -- Italian energy company Eni said Monday it was committed to getting the Kashagan oil project in Kazakhstan, one of the world's largest, up and running.

Eni Chief Executive Officer Claudio Descalzi met in Astana with Kazakh leaders to discuss developments at the offshore Kashagan oil field.

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Kashagan is among the largest oil fields in the world, with an estimated 16 billion barrels of oil reserves. Production was halted in October 2013, less than a month after it started, when a pipeline associated with the field cracked open.

Last week, members of the production consortium, which includes Eni, met with government officials and the North Caspian Operating Co. to review the project. Terms of an agreement charting the path forward remain confidential, though Descalzi said it was a positive step.

"This agreement provides further momentum to achieve the earliest safe restart of Kashagan," he said in a statement "These factors are particularly relevant in the current volatile market, which requires our industry to be increasingly selective in the capital investment programs."

In February, the U.S. Energy Information Administration said it expected Kashagan to return to service in 2015, but below its initial production target of 370,000 barrels per day "because technical challenges and high development costs may limit its expansion."

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Two months later, experts reviewing the pipeline issues at the field said it may cost as much as 15 times more than initially expects to restart the field.

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