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Bloomberg: Eni Group Fails to Make Deal With Kazakhs on Kashagan (Update1)

By Nariman Gizitdinov and Lucian Kim

Jan. 14 (Bloomberg) — Eni SpA and partners failed to reach an agreement with the Kazakhstan government over stakeholdings in the Kashagan oil field, Eni Chief Executive Officer Paolo Scaroni said, adding he doesn’t expect to return to the central Asian nation “for a long time.”

“We haven’t reached an agreement yet,” Scaroni told Bloomberg News in an interview early today in Astana, the Kazakh capital, after a nine-hour meeting with Kazakh Prime Minister Karim Masimov and the chief executives of companies including Exxon Mobil Corp. and Royal Dutch Shell Plc.

Kazakhstan, the second-biggest oil producer in the former Soviet Union after Russia, has demanded a redrawing of the Kashagan agreement after the Eni-led project was hampered by delays, technical complications and cost overruns that the government claims have boosted the price of developing and running the field to $136 billion. Kashagan, a giant offshore development in the Caspian Sea, is crucial for Kazakhstan to achieve its goal of doubling crude output by 2015.

Kashagan is the world’s largest oil discovery in three decades.

To contact the reporters on this story: Nariman Gizitdinov in Astana through the Moscow newsroom at [email protected] ; Lucian Kim in Astana through the Moscow newsroom at [email protected]

Last Updated: January 13, 2008 14:56 EST

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