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Behind closed doors discussed the Kazakh government the situation in Kashagan field

April 18 2014, 11:30

The government of Kazakhstan discussed the situation in Kashagan field with the consortium participants. The meeting was held behind closed doors, reports azh.kz, citing KazTAG news agency.

“We knew that on Thursday, April 17, there will be a meeting between the Kashagan project investors and members of the Kazakh government. Two days prior to that meeting we tried to find out about meeting agenda, its format, venue and time. Without giving any explanations we were just told that the meeting will be behind closed doors. After the meeting there was neither briefing nor press release circulated. Everything was wrapped in obscurity”, - writes KazTAG news agency, referring to its correspondent who reported this by phone late at night on Thursday.

Nevertheless, the news agency through its source in the government learnt a few details of the meeting.

“No specific decisions were made at the meeting. They discussed the current operation issues related to the field. Investors said about risks and that this year, probably, we shouldn't be expecting oil production re-start. If onshore pipelines are out of discussion, then the part that is under the sea still requires further examination after ice clearance. It requires time and money, therefore, the project participants took obligations to provide detailed plans only by the end of May” – noted the source.

Disappointment with hardly smoldering hope for a favorable outcome – this is how it’s possible to assess the overall spirit among the Kazakhstan government members regarding the situation in Kashagan.

“In our opinion, currently not a single government member dares to say that it is a total failure, leave alone the investors, who invested huge amounts of money into this gigantic project. Everybody understands that it is pointless to bang the table with fists and put pressure on foreign partners. They have experience, state-of art technologies, and most importantly – the money. Theoretically, they can also slap the door and leave, but it is improbable.

On the other hand, as we know, the shareholders more than once raised the issue of changing the operatorship of the Italian Agip for the British Shell even at the early stage of the project. But somehow it didn't work out. Maybe the reasons were the pedantry and primness of the British and promptitude and adaptableness of the Italians. The Kazakhstan government left everything as it is, having relied on obviously weak player both by experiment and finance. This, in its turn, led to compromises on repeated increase of the budget and numerous delays of commercial production start.

The new operator - NCOC inherited a difficult legacy on its final phase, but its main difficulty was to find consensus between the dissatisfied partners, as well as shareholders who were not happy with the latest situation in the field. Then there joined the Chinese partner, against whom were all the partners. For a long time it couldn't enter through the door, but then dexterously crept through a window leaf.

This was decided by the government and now due those circumstances the government doesn’t have any special privileges to dictate its terms. Huge financial resources have been already invested, the dates are postponed again and again and now the only final frontier is left - to defend the condition that was defined in October of last year. It states that the Kazakhstan party will not reimburse the expenses of foreign investors with the future oil. Certainly, they will try to do so, but, as they say, an agreement is worth more than money. Otherwise, farewell Kashagan...

If the Kazakhstan government is disappointed with the situation at Kashagan, then mass media is simply depressed because it has no access to firsthand information. We are forced to look for it in a roundabout way. Nevertheless, both at the field and in the government there are people who are ready to share information that calls public interest. After all, any classified information or issues that directly impact the wellbeing of Kazakhstan citizens, sooner or later become available to the public. As they say, you can’t hide a pricker in your bag, and in our case - in a ‘leaky’ pipe....

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