Speaking out: Karim Masimov
Astana 'has right to intervene'
Kazakhstan will exercise its right to intervene in developments if one of the investors tries to sell out, Kazakh Prime Minister Karim Masimov said today.
Kazakhstan is locked in a row with the Eni-led AgipKCO consortium developing the huge Kashagan oilfield over cost overruns and production delays. Kazakhstan has said one of the members, ExxonMobil, is against a proposed settlement plan.
Speaking at a business conference in Astana, Masimov stressed Kazakhstan's commitment to the continuity of existing contracts in the natural resources sector.
"But if an investor has broken a contract, the government has the right to review (the contract). Also, if an investor is selling its natural resource business, then the government has the right to intervene in this case," Reuters quoted him as saying.
"We are holding talks on Kashagan. I hope that this question will be settled soon," he added, without specifying in what way the government might intervene.
Kazakhstan has passed legislation this year that allows the government to change or break contracts with natural resources companies if it sees a threat to national security.
Kazakhstan wants the Kashagan consortium members to reduce their shareholdings and significantly raise state oil company KazMunaiGaz' 8.3% interest. Kazakhstan's energy minister said this week that ExxonMobil was against the plan.
The US supermajor, which has an 18.52% stake in Kashagan, has not commented on the matter and the mechanism of the proposal remains unclear.
Other AgipKCO members are Eni, Shell and Total, who all hold stakes of similar size to ExxonMobil. Smaller stakes belong to ConocoPhilips, with 9.26%, and Japan's Inpex, with 8.33%.
Kazakhstan has accused the consortium of a host of violations, including ecological, and blamed its management for allowing costs to spiral and delaying the start of production.
The Caspian Sea field is at the heart of Kazakhstan's ambition to triple oil output by 2017. It is now due to start pumping oil in 2010, instead of the original 2005 target.
Meanwhile, Masimov said state-owned KazMunaiGaz intends to buy a blocking stake in independent oil producer MangistauMunaiGaz.
"Our national oil company KazMunaiGaz approached me yesterday asking permission to buy a big, blocking stake in oil company MangistauMunaiGaz. I gave them permisson," Masimov told a conference.
KazMunaiGaz subsidiary KazMunaiGaz Exploration & Production has previously said it would be interested in acquiring MangistauMunaiGaz.
Masimov did not specify whether parent company KazMunaiGaz or its London-listed exploration subsidiary would buy the stake in MangistauMunaiGaz.
He also did not say how much KazMunaiGaz would pay, or what the size of the stake it would take.