ASTANA. May 28 (Interfax) - Members of the North Caspian Operating Company consortium (NCOC), the operator of the Northern Caspian project, will be providing $986 million of KazMunayGas's investment stake in the Kashagan project this year and next.

"Fort the consortium that will be about $986 million in all of two years - in 2012-2013," Oil and Gas Minister Sauat Mynbayev told the press on Monday in Astana.

Last week an agreement was signed regarding the regulation of a number of issues involved in the project between the Kazakh government and subcontractor companies. This document involves other NCOC members financing KazMunayGas's stake in the project in 2012-2013.

Future KazMunayGas invesmrtent will depend on the second stage, Mynbayev said. "If the second phase of Kashagan is approved, then it needs to be discussed. There is no second phase today. If things remain as they are, in the context of the trial-industrial stage of development, then in principle the cash that the project generates with the beginning of commercial production will suffice to service operational activities," the minister said.

At the end of this January, Mynbayev said that NCOC shareholders' proposal to increase the phase-one budget for the deposit's development by $7 billion was yet to be settled and that the ministry was insisting that the proposed amount be reduced.

Also unresolved was the issue of agreeing a second Kashagan deposit development stage. If a project decision is made on a second phase, future costs will be totted up, and a schedule and final project decision worked out.

His ministry is not looking to uphold any concept for a second phase of Kashagan development due to its ineffectiveness, Mynbayev said.

The Telegraph reported that Kazakhstan plans to halt work on the main Kashagan Kashagan development phase for three years due to a lack of phase-2 coordination in the proposed budget.

The Phase II entails boosting production to 375,000 barrels per day for at least three years. Agip oversees offshore projects, while Shell and Exxon manage onshore works and drilling.

Commercial production at the Kashagan field is slated to commence in December 2012 - June 2013. During Phase I, oil production is expected to be about 370,000 barrels per day, with a possible increase to 450,000 barrels.

In accordance with the project's production sharing agreement, the company holds licenses for drilling operations at the Kashagan, Kalamkas, Aktoty and Kairan fields, which are comprised of 11 blocks covering a total area of 5,600 square kilometers.

Recoverable oil reserves at Kashagan are estimated at 11 billion barrels, and total geological reserves of material at this oil-bearing structure - 35 billion barrels. Kashagan is considered to be the world's largest oil field after the discovery of the Prudhoe Bay field in Alaska in 1968.

The bulk of the work at the onshore and offshore facilities had been completed by the end of 2009, as agreed with the Kazakh government, with a view to starting production at Kashagan at the end of 2012.