Crippled Kashagan oil project a bureaucratic "nightmare"

|By:, SA News Editor

The giant Kashagan oil field, which was brought to a halt by leaks shortly after start-up last year, is grappling with a bureaucratic "nightmare" on top of its engineering troubles as it strives for commercial production in 2014, according to a Reuters report.

The scale and complexity of the project, which has cost ~$50B so far, led its partners - which include Exxon (XOM), Shell (RDS.A, RDS.B), Total (TOT) and Eni (E) - away from the traditional single operator command-and-control model, where one of the larger companies takes charge while others provide support and share risks, costs and rewards.

Commercial production could still be many months away, and engineering difficulties have exposed the weaknesses of the cumbersome administrative structure, which will stay in place until oil is flowing properly.