UPDATE: Kashagan Phase 1 To Be 72% Complete By End 09 - NCOC

The first phase of the giant Kashagan oil field development in the Caspian Sea will be 72% complete by the end of this year, the field's operator said Thursday.

"Phase 1 is currently at the construction phase and should reach 72% threshold of completion at the end of 2009," Pierre Offant, the managing director of the North Caspian Operating Company, or NCOC, told an energy conference in the Kazakh capital Astana. "It is designed to reach production of 450,000 barrels of oil per day."

He maintained that first oil from Kashagan would be produced in 2012.

Offant also said that the second phase of the Kashagan development was "currently" in the feasibility stage.

He refused to tell reporters as to when the second and third phases of the field development would take place. Production will reach 1 million and 1.5 million b/d at the second and third phases respectively.

"This is really under assessment today," he said when asked about the phase timelines.

NCOC has been managing Kashagan since January as a result of a dispute between the consortium of international oil majors, including ExxonMobil Corp. (XOM), ConocoPhillips (COP) and Eni SpA (E), and the Kazakh government over repeated delays of the start of production.

Kazakhstan doubled its stake in the Kashagan consortium after the dispute which also resulted in the creation of the new operator, NCOC.

Kashagan will be Kazakhstan's largest-producing field when it reaches the second phase of development.

-By Kadyr Toktogulov, Dow Jones Newswires; [phone], [e-mail]

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