Bloomberg News

Eni Probe Won’t Hurt Kashagan Oil Project, Kazakh Ministry Says

May 11, 2012

An Italian probe of Eni SpA (ENI)’s activities in Kazakhstan won’t hurt the development of the central Asian country’s biggest oil field, according to Kanatbek Safinov, an official at the Oil and Gas Ministry.

“This will not have an influence” on the Kashagan oil development, Safinov told reporters today in the capital, Astana. “The country’s going to develop this project.”

The Kashagan partners, including Royal Dutch Shell Plc (RDSA), Exxon Mobil Corp. and Total SA as well as Eni and Kazakhstan’s KazMunaiGaz National Co., plan to start output at the Caspian Sea field by the end of 2012 or the middle of next year, after years of delays and a budget that swelled to $39 billion. The government is pushing for an expansion of the project, which Kazakh President Nursultan Nazarbayev has said would help turn the country into one of the world’s five largest oil exporters.

Eni, through its Agip KCO unit, is responsible for operating Kashagan until the first oil is produced. The company agreed to relinquish its role as sole operator in 2008 amid a dispute between the partners and the Kazakh government that ended with the state increasing its stake and gaining higher royalties. Shell and KazMunaiGaz will be in charge of production operations, while North Caspian Operating Co., a venture between the partners known as NCOC, oversees the project, according to the venture’s website.

The Milan prosecutor is seeking court administration for Agip KCO or a ban on its negotiating contracts in Kazakhstan, amid a probe into “international corruption,” Corriere della Sera reported yesterday. A hearing is scheduled for May 29, the newspaper said. An Eni spokesman who declined to be identified, citing company policy, declined to comment when called by Bloomberg News yesterday.

The investigation relates to 2004-2005 and Eni has cooperated with prosecutors since 2009, Ansa news service reported, citing Chief Executive Officer Paolo Scaroni yesterday in Rome. Scaroni said he’s “calm,” Ansa reported.

To contact the reporter on this story: Svetlana Antoncheva in Astana, Kazakhstan at santoncheva1@bloomberg.net

To contact the editor responsible for this story: Hellmuth Tromm at htromm@bloomberg.net


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