The final investment go-ahead for Kashagan will enable Shell to start rebooking its share of the field - one of the projects that was featured in last month's shock reserves downgrade by the company.
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Kazakhastan Fines Oil Majors
Hundreds of millions of dollars demanded from Shell, ExxonMobil, and other partners...
The Kazakh government has decided to fine an international consortium, led by Shell, hundreds of millions of dollars for delaying the start of production from the world's largest untapped oil discovery.
Shell and its partners, who include ENI of Italy, Exxon Mobil and ConocoPhillips, had agreed to spend $29bn developing the giant Kashagan field in the Caspian Sea, which is estimated to contain 13 billion barrels of recoverable oil - more than the entire reserves of the Opec member Nigeria.
However, production will not start until 2007 or 2008 - three years later than planned - meaning that Shell and its partners will have to pay compensation. The companies and the Kazakhstan government refused to say how big the compensation would be although one official said it would run into "hundreds of millions of dollars".
The final investment go-ahead for Kashagan will enable Shell to start rebooking its share of the field - one of the projects that was featured in last month's shock reserves downgrade by the company.
The final investment go-ahead for Kashagan will enable Shell to start rebooking its share of the field - one of the projects that was featured in last month's shock reserves downgrade by the company.
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