* Minister: Kashagan partners to pay $986 mln KMG investment
* Kashagan first phase to begin production by June 2013
* Minister says second phase will require new negotiations
* Developers expect no impact from Eni corruption probe
By Raushan Nurshayeva
ASTANA, May 28 (Reuters) - Kazakhstan's foreign partners in developing the Kashagan oilfield will pay almost $1 billion this year and next to cover the state's portion of investment in the world's biggest oil discovery in 40 years, the oil and gas minister said on Monday.
Consortium members, including Eni, ExxonMobil and Shell, agreed last week to fund the investment share of state oil and gas company KazMunaiGas to bring the first phase of Kashagan into production by June 2013.
"For the consortium, this will be in the region of $986 million in 2012 and 2013," Kazakh Oil and Gas Minister Sauat Mynbayev told reporters.
"Cash generated from the start of commercial production will be enough to service operating activities," he said.
A more assertive Kazakhstan, the largest economy in Central Asia and second only to Russia among former Soviet oil producers, has sought in recent years to revise deals struck with foreign energy companies in the lean post-Soviet years.
The country, four times the size of Texas and home to three percent of the world's recoverable oil reserves, has also moved to exert greater management control and secure bigger revenues from foreign-owned oil and gas developments.
Development of the Kashagan field, the biggest oil discovery since Prudhoe Bay in Alaska in the 1960s, has been beset by delays, rising costs and technical complications since it was declared commercially viable 10 years ago.
Kazakhstan expects the 9 billion-barrel field in the Caspian Sea to be the main driver of its plans to raise oil output by 60 percent by the end of the decade from 80 million tonnes in 2011.
The first phase of production at Kashagan is scheduled to begin by the end of 2012 or early 2013, with output of between 370,000 barrels per day that could subsequently rise to 450,000 barrels per day.
North Caspian Operating Company (NCOC), the consortium developing the field, said in a statement on May 23 that its members had agreed on an amendment to the Kashagan development plan and budget. It gave no details of the investment required.
KazMunaiGas entered the project as a shareholder in 2005 and later doubled its stake to 16.81 percent.
Similar stakes in the consortium are held by Eni, ExxonMobil, Royal Dutch Shell and French energy company Total .
ConocoPhillips owns 8.40 percent and Japan's Inpex 7.56 percent.
"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," NCOC said in the statement.
"However, the consortium continues to manage the project with a target date of end-2012 and all reasonable efforts are being made to achieve commercial production as soon as practicable."
A second phase of development at Kashagan, frozen by disagreements over costs that will run into tens of billions of dollars, would take production toward 1 million barrels per day. But Kazakhstan has yet to give the go-ahead.
"If the second phase of Kashagan is confirmed, then further negotiations will be required. As of today, the second phase does not exist," said Mynbayev.
As part of the agreement signed last week, Kashagan partners also consented to a long-term agreement to market some of the natural gas produced at the field within Kazakhstan, the NCOC and Kazakh Oil and Gas Ministry said in separate statements.
The ministry said the partners had agreed to sign a sales and purchase agreement with state-run gas transportation company KazTransGas to supply up to 83 percent of gas from the first phase to the domestic market.
Both NCOC and the ministry said they did not expect an Italian corruption investigation to have any impact on Kashagan.
Prosecutors in Milan this month asked a court to place Eni's Kazakh Agip KCO unit under special administration or ban the unit from negotiating contracts in Kazakhstan, a judicial source told Reuters.
"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," NCOC said.