Kazakhstan has warned a foreign consortium led by Eni, the Italian oil company, that it will demand better terms at the giant Kashagan oilfield in the Caspian Sea to compensate for soaring costs and the delayed launch of production at one of the world's most challenging oilfield developments.

Baktykozha Izmukhambetov, Kazakhstan's energy minister, told a government meeting yesterday that Eni had lifted its estimate of the full cost of developing Kashagan from $57bn (€41.6bn, £28bn) to $137bn after encountering technical difficulties in the field. Eni had also postponed Kashagan's start-up by two years to 2010, he said.