Speaking out: Nursultan Nazarbayev
Astana lays down Kashagan terms
Kazakhstan will demand either cash compensation or a bigger state stake in the AgipKCO consortium developing Kashagan, but Eni will stay in place as the field's operator, Kazakh President Nursultan Nazarbayev said this morning.
The country has accused AgipKCO of various violations, including environmental damage, and has blamed its management for allowing costs to spiral and delaying the start of production.
"Our government is holding talks with everyone to achieve a solution and come to an agreement peacefully," Nazarbayev told Reuters.
"We are not talking about abandoning the contract... There is no discussion about changing the operator," he added.
"There are different ways (of settling) the matter: either (paying) the sum we have set ... or Kazakhstan raises its participation... We will solve this matter in a way all sides can be happy," he added.
A source close to the talks told the news agency last week that Kazakhstan was seeking more than $7 billion in compensation for the delays.
The Kashagan 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.
The dispute has been escalating for several months and talks hit a snag last week after Kazakhstan said ExxonMobil was against a settlement plan.
Operator Eni, Shell and ExxonMobil have 18.52% in Kashagan each. Smaller stakes belong to ConocoPhillips, with 9.26%, and Japan's Inpex, with 8.33%.
Kazakhstan has suggested the consortium members cut their shareholdings and significantly raise state oil company KazMunaiGaz' 8.3% stake in Kashagan.