ALMATY, June 13 (Reuters) - Members of the internationalconsortium developing Kazakhstan's giant Kashagan oilfield andthe central Asian state's government will discuss changes to thecontract that governs the project, which has seen massive costoverruns and delays.
The production sharing agreement (PSA) is due to expire in2041. Industry sources say that foreign shareholders in the $50billion project are keen to extend it to recouphigher-than-expected costs caused by repeated postponement ofproduction deadlines.
Production at Kashagan, one of the world's biggest oil findsof recent times, was originally set for 2005, but only startedlast September.
However, output was almost immediately halted after thediscovery of gas leaks in the pipeline network and may notrestart until 2016, according to Kazakh Oil & Gas MinisterUzakbai Karabalin.
The North Caspian Operating Company (NCOC) on Friday said amemorandum of understanding was signed this week agreeing todiscuss "the potential progression of future phases ofdevelopment and production of the Kashagan project."
The Financial Times business daily on Friday cited a sourceclose to the Kashagan project as saying that Kazakhstan hadalready agreed to extend the contract for the project.
"Discussions ... within the framework of this memorandum ofunderstanding will continue in the months ahead to advancedevelopment plans," the NCOC statement said.
The members of the North Caspian Production SharingAgreement are Agip Caspian Sea B.V., CNPC KazakhstanB.V., ExxonMobil Kazakhstan Inc., Inpex NorthCaspian Sea Ltd, KMG Kashagan B.V., Shell KazakhstanDevelopment BV and Total E&P Kazakhstan. (Reporting by Dmitry Solovyov; Editing by Erica Billingham)
