Tete-a-Tete: Kazakh President Nursultan Nazarbayev met ExxonMobil executive Mark Albers today
Nazarbayev leans on ExxonMobil brass
Kazakhstan's President Nursultan Nazarbayev today met senior officials of US supermajor ExxonMobil, which has been resisting the country's proposals to take a larger stake in the giant Kashagan oilfield from the Eni-led AgipKCO consortium.
Kazakhstan has been locked for months in a dispute with AgipKCO, which is developing the Caspian Sea oilfield, with a Cabinet minister earlier this week claiming ExxonMobil as the only member of the group that is opposing a proposed settlement.
Nazarbayev held talks with Mark Albers, ExxonMobil's senior vice president, but little emerged from behind the closed doors of the presidential palace meeting.
Albers refused to elaborate on Kashagan afterwards, just telling reporters they had discussed "lots of things", Reuters said.
Kazakhstan, which has complained of delays, cost overruns and environmental infringements, wants the consortium members to cut their shareholdings and significantly raise state oil company KazMunaiGaz' 8.3% stake in Kashagan.
KazMunaiGaz boss Uzakbai Karabalin, who took part today's talks, was more upbeat about the negotiations.
"We always achieve progress when the president (Nazarbayev) is involved," he said.
The US supermajor, which has an 18.52% stake in Kashagan, has not commented on its position on the matter.
Other Kashagan 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%.
ExxonMobil and other officials were in the Kazakh capital Astana to attend a wider foreign investment conference tomorrow.
A senior government source close to the Kashagan talks told Reuters today Kazakhstan had yet to propose an exact scheme on the transfer of the stakes but added that all other participants were willing to go ahead with the plan.
"No one wants to leave the project. They are ready to proportionally reduce their stakes and sell them. ExxonMobil is the exception," the source said.
Earlier in the day, Kazakh Prime Minister Karim Masimov told a conference Kazakhstan would exercise its right to intervene in natural resources projects if an investor tried to sell out.
"...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," he said.
He did not say in what it might intervene in such cases but stressed Kazakhstan's commitment to existing contracts.
Kazakhstan alarmed investors last month when it passed legislation empowering the government to change or break contracts with natural resources companies if it saw a threat to national security.
Kazakhstan has accused the Kashagan consortium of a host of violations, including environmental infringements, 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.