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UpstreamOnline: Kazakhs ‘may extend Kashagan deadline’

By Upstream staff

Talks to settle a dispute between Kazakhstan and the operators of its giant Kashagan oilfield may extend beyond the formal deadline of 30 November, but a deal could still be reached by the end of this year, Kazakh Energy Minister Sauat said today.

Mynbayev said that negotiations – set to continue this week in London – would not be easy but had not involved discussion on the removal of Italian energy giant Eni as operator of the field.

“We hope to reach an agreement, but it’s difficult to foresee whether we will have success or not. The talks won’t be easy,” Reuters reported he said at the World Energy Congress in Rome.

Kashagan is the world’s biggest oil find in three decades, but its development has been plagued by cost overruns and delays which have irked Kazakhstan.

The oil-rich country has accused Eni and its partners, — supermajors Shell, ExxonMobil and ConocoPhillips, French giant Total and Japan’s Inpex Holdings – of environmental breaches and other violations.

Mynbayev said Kazakhstan would probably propose a greater participation for state oil company KazMunaiGas in the project, or a greater share for his country in the oil profits.

“We want to restore the balance of interest,” he said. “I don’t know which proportion will be … in the final consideration.”

Earlier this week, Eni Chief Executive Paolo Scaroni said his company was keen to retain its lead status on the project.

Scaroni, who said on Sunday it was “not a great moment” for the talks, told reporters today “If it were up to me, it would all be sorted by 30 November.”

Kazakhstan has previously demanded billions of dollars in compensation for delays and wants a bigger role for KazMunaiGas.
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14 November 2007 22:37 GMT  | last updated: 14 November 2007 22:37 GMT

http://www.upstreamonline.com/live/article144196.ece

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