August 23, 2007
Richard Owen in Rome
Romano Prodi, the Italian Prime Minister, is to meet Karim Masimov, his Kazakh counterpart, in an attempt to stave off the cancellation of Eni’s Kashagan oil project because of alleged ecological damage to the Caspian Sea and its wildlife.
Nurlan Iskakov, the Kazakh Environment Minister, said: “Taking into account the company’s previous failure to meet its obligations, we must withdraw the permit, as the company’s work is causing irreparable damage.”
However, energy analysts said that the real reason for the move is that Kazakhstan, like Russia and Venezuela, is putting pressure on international oil companies to agree to more favourable terms. Last month, its Government demanded 40 per cent of the profits from the Kashagan project, rather than the original 10 per cent, claiming that its costs had more than doubled to $136 billion (£68 billion).