The consortium is made up of Royal Dutch/Shell, Eni SpA, ExxonMobil, Agip SA, Inpex, ConocoPhilips and British Gas (BG), although BG is reported to be considering selling its stake to Shell.

Production at the field, which was discovered in 2000, has long been delayed by disagreements over the timescale of development, the size of the investment, the field's relative remoteness, its lack of established and unique technical challenges like the sea icing up in winter.

In a statement released to the media, Shell announced, "Production [is] targeted to begin in 2008, rising from an initial 75,000 barrels a day to 1.2 million barrels by 2016. The US$29 billion investment, of which Shell's share will be about US$6 billion, will be spread across 15 years."

Whilst neither the consortium nor the Kazakh government will divulge the fiscal value of the lateness penalty will be, an unnamed Kazakh official revealed that the figure could run into the "hundreds of millions of dollars".

Kashagan - located in the Caspian Sea - is considered the world's largest untapped oil discovery with estimated reserves of around 13 billion barrels of recoverable oil ... roughly more than the entire oil reserves of Nigeria.