Kashagan plans back on table
News agencies
Executives from the Eni-led AgipKCO consortium, which is developing the
Kashagan field, met for talks with Kazakh officials today in a bid to push
ahead with the project's new development plan, a source close to the talks
said.
The consortium, which includes ExxonMobil, and Shell, is due to submit its
proposals for the massive Caspian Sea field's development by the end of this
month.
The source told Reuters consortium members and Kazakh officials met in the
capital Astana to discuss details of a deal reached in January that ended
months of tense negotiations over cost overruns and production delays at
Kashagan.
The source said vice-presidents of consortium companies were holding
closed-door talks with senior officials from the Kazakh energy ministry and
national oil company KazMunaiGaz.
The January deal, while calming investor confidence shaken after six months of
squabbling between Kazakhstan and AgipKCO, will be enforced only after the
sides agree on the precise production and structural details of the project.
Under that deal, KazMunaiGaz would double its stake in Kashagan and strip Eni
of its leading role in the project, whose production start has been further
delayed to the end of 2011.
Industry sources have said the deadline for the proposals, set at 31 May, may
be pushed further if either of the sides requires more time to finalise
details, particularly the start of production and the structure of its new
managing company.
The stand-off over Kashagan started in August when the Kazakh government
accused its shareholders of allowing costs to spiral to $136 billion from
$57 billion, and delaying the start of production from the original 2005
target.
Analysts have interpreted Kazakhstan's tough stance on Kashagan as part of the
growing trend of resource nationalism in the world, spurred by soaring
prices for oil.
Under the January deal, KazMunaiGas was set to pay $1.78 billion to raise its
stake to 16.81% from 8.33%, raising it status to that of the biggest
Kashagan investors.
Other shareholders would cut their stakes on a pro-rata basis. The largest
shareholders in the group are Eni,Shell, ExxonMobil and Total , followed by
smaller shareholders ConocoPhillips and Inpex.
08 May 2008 11:31 GMT
| last updated:
08 May 2008 11:31 GMT
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