OREANDA-NEWS. May 30, 2012. Partners of the North Caspian Sea Consortium and the Production Sharing Agreement (PSA) Authority of the Republic of Kazakhstan have reached agreement on the Amendment to the Kashagan Development Plan and Budget.

Under the North Caspian Sea PSA, the approval of the Amendment was required for revisions of the Development Plan including an update to the project schedule and investment estimates. The Consortium partners have also agreed to a commercial framework to contract a share of natural gas produced from Kashagan for domestic marketing.

With this agreement, the PSA Authority and the Consortium partners have reaffirmed their commitment to continued close cooperation in developing the Kashagan field as a world-class project designed and operated to the highest environmental and safety standards. In consideration of the potential schedule risk on a project of this size and technical complexity, commercial production is projected to be achieved in the first half of 2013. However the Consortium continues to manage the project with a target date of end of 2012 and all reasonable efforts are being made to achieve commercial production as soon as practicable.

Development of the Kashagan field has created significant employment and business opportunities for Kazakhstan and will continue to provide long term benefits to the Republic in terms of revenue, production and significant socio-economic benefits.

The Consortium is aware of the ongoing investigation by the Italian Judicial Authorities and at present, does not expect that it will have an impact on the activities to achieve commercial production which are continuing as per the approved plan.