ENI Approves Development Plan for Kashagan Field

Eni, operator of the North Caspian Sea Production Sharing Agreement, the Kazakh oil company Kazmunaygas (KMG) and the Petroleum Authority of the Republic of Kazakhstan announce that the Development Plan of Kashagan, the giant field in the Kazakh offshore of the Caspian Sea, was approved today in Astana.

Kashagan, which has recoverable reserves of up to 13 billion barrels, is one of the largest fields discovered over the last thirty years and represents one of the greatest challenges the petroleum industry has been lately faced with, both in terms of extremely severe climatic conditions and respect of the sensitive environmental balance.

The development of Kashagan will be implemented in multiple phases. In the first one, already under way, production will reach 75,000 barrels of oil per day in 2008 to gradually increase to 450,000 barrels per day. Production will increase during the following stages at an expected plateau of 1,200,000 barrels per day. Offshore facilities for raw and inert gas injection in the reservoir will be built in order to maximize oil recovery and to reduce sulphur production. Due to high reservoir pressure and the presence of hydrogen sulphide, the technologies adopted in Kashagan are among the most advanced in the world.

Eni is completing a study to identify the best oil export routes in the Caspian region. The investment for the full field development is estimated at approximately US $ 29 billion over fifteen years (about 5 billion in Eni share).

The Kashagan project will positively affect the Kazakh economy, also thanks to the involvement of the country's industry in the realization of the works necessary for the project's development. To this end, Eni has launched training programs for young engineers and managers of the Kazakh petroleum industry.

"It is with great satisfaction that we announce, jointly with our partners, the start-up of the development of the Kashagan giant field" declared the Chief Executive Officer of Eni, Vittorio Mincato. "In particular, this is an important step towards the growth of Eni as a company and attests to the international acknowledgement of our capabilities of excellence. The field's impressive size, the harsh climatic conditions and the technological difficulties have called for the utilization of the best skills and the most advanced technological solutions available to the oil industry, capable of guaranteeing the utmost protection of the delicate ecosystem of the Caspian Basin".

The partners of the North Caspian Sea PSA are: Eni (Operator 16.67%), BG (16,67%), ConocoPhillips (8.33), ExxonMobil (16.67%), Inpex (8.33), Total (16.67%), Shell (16.67%).

Kashagan, which has recoverable reserves of up to 13 billion barrels, is one of the largest fields discovered over the last thirty years and represents one of the greatest challenges the petroleum industry has been lately faced with, both in terms of extremely severe climatic conditions and respect of the sensitive environmental balance.
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