U.S. oil giant, ExxonMobil Corporation (XOM - Free Report) is reportedly poised to take over as operator of the giant Kashagan field.
The move is an effort to resolve issues related to the $50 billion project offshore Kazakhstan. According to sources, ExxonMobil could assume the new role as early as the end of this month.
Italy’s Eni SpA (E - Free Report) was appointed the operator of the project in 2001 but later removed from its role as the sole lead operator following major delays and cost overruns.
After several delays, production commenced in Sep 2013 to halt again in early October due to the discovery of gas leaks in the pipeline network.
Kazakh Oil and Gas Minister said that the oil production is not likely to resume until early 2016 and advocated that foreign partners should begin restoring leaky pipelines at the deposit.
The project is estimated to take another two to three years to attain the targeted plateau output of 370,000 barrels per day.
The shareholders in the Kashagan project include Eni, ExxonMobil, Royal Dutch Shell plc (RDS.A - Free Report) , Frances’ Total SA (TOT - Free Report) and Kazakh state oil company, Kazmunaigas, which hold 16.8% stake each respectively, and Japan's Inpex and China National Petroleum Corp. (CNPC) as junior partners.
ExxonMobil Corporation is the world’s largest publicly traded oil company, engaged in oil and natural gas exploration and production, petroleum products refining and marketing, chemicals manufacture, and other energy-related businesses. Approximately 83% of Exxon’s earnings are derived from its operations outside the U.S. The company divides its operations into three segments: Upstream, Downstream and Chemicals.
At present, Exxon Mobil carries a Zacks Rank #3 (Hold).