ROME Aug 22, 2007 (Dow Jones)
Italy's Eni SpA (E) Wednesday said that the consortium that it leads to operate the giant Kashagan offshore oil field has been notified by the Kazakh Environment Ministry of alleged environmental violations by the consortium there. Eni is evaluating the complaint, the company added.
Press reports Tuesday said the Kashagan project, which has already faced several delays and cost overruns, might be halted due to the alleged environmental violations.
Agip KCO, the field's operator, is owned by Eni.
Eni said it presented a plan to the Kazakh authorities on behalf of the joint venture in July, which forecast 2010 as the first date oil would be pumped. This presentation also confirmed the increase in costs.
Analysts at Credit Suisse said Wednesday that the Kashagan risks have already been reflected in Eni's share price.
By 0927 GMT, Eni shares were up 1.7% at EUR24.05, outperforming an overall positive market.
Italian Prime Minister Romano Prodi could visit Kazakhstan in October, amid growing tensions between partly state-owned oil and gas company Eni SpA (E) and the Kazakh authorities over Eni's contract to develop the country's Kashagan oil field, a spokesman for Prodi told Dow Jones Newswires Wednesday.
The spokesman said no decision has yet been taken but the visit is being considered in discussions with the Kazakh authorities.
"It is normal that we will discuss important economic issues, and Kashagan is an important economic issue," the spokesman said in a telephone interview.
Copyright (c) 2007 Dow Jones & Company, Inc.
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