GO
Loading...

Kazakhstan Says Higher Oil Stake Not Key Goal

Reuters
Thursday, 27 Sep 2007 | 7:47 AM ET

Kazakhstan said on Thursday that securing a bigger stake in the huge Kashagan oilfield was not its main goal in a row with the project's Italian-led consortium of Western oil majors.

Kazakhstan raised its bargaining power in the oil dispute earlier in the day when the upper house of parliament approved legislation empowering the government to unilaterally break contracts with foreign investors.

But Energy Minister Sauat Mynbayev, speaking after the bill was passed, sought to strike a more conciliatory tone by saying talks with the Eni-led group were "friendly."

"It's not essential for us to raise the share. That's not the main question," he said. "What is essential is to approve or disapprove of Kashagan's development plan and budget."

Last month Kazakhstan halted work at Kashagan, the world's biggest oil find in three decades, in a dispute over spiraling costs and delays.

Eni's role as the main operator of Kashagan also appeared under question after Kazakhstan demanded a leading role for its state oil and gas company in the project earlier this month.

KazMunaiGas, the state company, has 8.3% in Kashagan.

The amendments, which have yet to be signed into law by President Nursultan Nazarbayev, alarmed investors because they allow the government to change or break contracts with domestic and foreign firms if it saw a threat to national security.

"We believe that we cannot approve (the project) as it is," the energy minister said. "The essence of the talks is in finding a way to restore the balance of interests."

Kashagan's start of production has been delayed to the second half of 2010, slipping from an initial 2005 target. Its cost has escalated from $57 billion to $136 billion, according to the Kazakh energy ministry.

Other participants in the consortium are Royal Dutch Shell, Exxon Mobil, Total, ConocoPhillips and Japan's Inpex Holdings.

  Price   Change %Change
COP
---
XOM
---

Featured

Contact Utilities

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Energy

  • Pump jacks and wells are seen in an oil field on the Monterey Shale formation where gas and oil extraction using hydraulic fracturing, or fracking, is on the verge of a boom, March 23, 2014 near McKittrick, California.

    Brent crude futures turned lower after Russia said top diplomats have agreed to take immediate steps toward calming tensions in Ukraine.

  • An employee wipes a TV screen in a shop in Moscow, on April 17, 2014, during the broadcast of President Vladimir Putin's televised question and answer session with the nation.

    Russian President Vladimir Putin warned of possible disruption to Europe's gas supply on Thursday, as the U.S. confirmed it would send additional military support to Ukraine.

  • A former BP employee will pay to settle allegations of insider-trading during the 2010 Deepwater Horizon oil spill.