FT: Kashagan delays mar outlook for Eni, Total and Shell

Three of Europe’s largest oil companies could take a $1.5bn hit to earnings as a result of delays to Kashagan, the $50bn oil project in the Caspian Sea that has been bedevilled by hold-ups and cost over-runs.

Morgan Stanley, the banking group, said it had reduced its 2016 net income estimates for Eni, Total and Royal Dutch Shell, which each have a 16.8 per cent stake in the project, by $500m for each company.

That represents 6 per cent of Eni’s estimated net income in 2016, 3 per cent of Total’s, and 2 per cent of Shell’s, the bank said.

The delays come at a sensitive time for the European oil majors, which are gearing up to unveil their second-quarter results in the coming days. The companies have recently gone through a period of heavy spending to boost growth and are under pressure from investors to repair their balance sheets.
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