Azernews.Az

ASTANA – Eni SpA (ENI), Royal Dutch Shell Plc (RDSA) and their partners in the Kashagan oil field in Kazakhstan will complete a design review later this year meant to optimize costs for expanding the project, the operator said on Tuesday, Bloomberg reported.

The design will be presented to shareholders and the government in the second half of 2011, a spokesman for North Caspian Operating Co. said today by e-mail, declining to be identified because of company policy. Once approved, front-end engineering and design will start, and the cost and schedule will be worked out, he said.

Kazakhstan may delay Phase II as the partners seek a simplified design that would cut costs by $18 billion to $50 billion, the Daily Telegraph reported today, citing an identified official. The freeze would delay plans to ramp up to full production, the newspaper said.

Shell and its partners started a review of the project’s design in 2009 to ensure that the expansion is "as economically robust as possible."

First output from Kashagan, the world’s fifth-largest oil field, is slated for next year after years of postponements. The group agreed in 2008 to give the Kazakh government more royalties and oversight at the Caspian Sea deposit.