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Gulf Daily News (Bahrain): Eni group close to increasing firm’s stake in oilfield

Monday 3 December 2007

ASTANA: All but one member of an Eni-led consortium developing the huge Kashagan oilfield in Kazakhstan have agreed to raise Kazakh state oil company KazMunaiGas’s stake in the project, the company said yesterday.

Kazakhstan has been at loggerheads with the Eni-led group over cost overruns and production delays at the Caspian Sea field – the biggest oil find in three decades.

The sides set December 20 as the deadline to find a settlement.

“According to a new memorandum of understanding, all consortium members except one have reached principal agreement to hand over parts of their stakes in the project necessary to raise interest to a level of a large participant,” KazMunaiGas said.

The Kazakh company did not say which company opposed the agreement or what percentage stake it was aiming at. It was also unclear whether the transfer of shares could go ahead without this company’s approval.

ExxonMobil has 18.52 per cent in Kashagan, alongside Eni, Royal Dutch Shell and Total, which have stakes of similar size.

Smaller stakes are held by ConocoPhilips, with 9.26pc, and Japan’s Inpex with 8.33pc. KazMunaiGas itself has 8.3pc.

Oil executives said they expected the US companies to take a tougher line with the government than their European and Japanese partners, who have made such concessions before, in Russia and Venezuela.

Exxon and Conoco pulled out of Venezuela rather than give in to Caracas’s demands for greater control of oil projects.

In October Interfax news agency reported that talks on a Kashagan settlement had stalled as Exxon was blocking the expansion of the state’s share in the project.

Apart from raising KMG’s stake, Kazakhstan has demanded billions of dollars in compensation from the consortium.It has, however, scaled down its demands in recent months.

A source close to the talks said Kazakhstan currently sought $7bn as opposed to over $10bn in September.

KazMunaiGas said the group would finalise the details of the stake
 
http://www.gulf-daily-news.com/Story.asp?Article=201830&Sn=BUSI&IssueID=30258

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