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UPDATE 5-Kazakhs win better terms on Kashagan, talks go on

Fri Dec 21, 2007 4:40pm EST
 
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By Raushan Nurshayeva and Dmitry Zhdannikov

ASTANA, Dec 21 (Reuters) - The major oil companies overseeing the massive Kashagan oil project in Kazakhstan have conceded more profits from the field to the country, but the state wants a larger stake, industry sources said on Friday.

The new terms would decrease the value of the field to the Eni-led (ENI.MI: Quote, Profile, Research, Stock Buzz) consortium by billions of dollars.

This is the latest move by resource-rich countries such as Kazakhstan to alter contracts as commodity prices soar.

A source close to the talks said the group also agreed to pay the central Asian state between $2 billion and $4 billion cash, depending on international oil prices, for delays in developing the field, one of the world's largest oil deposits.

The consortium, which includes Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz), Total (TOTF.PA: Quote, Profile, Research, Stock Buzz), Exxon Mobil (XOM.N: Quote, Profile, Research, Stock Buzz), ConocoPhillips (COP.N: Quote, Profile, Research, Stock Buzz) and Japan's Inpex (1605.T: Quote, Profile, Research, Stock Buzz), has been in talks with Kazakhstan for months after the state complained of delays, cost overruns and environmental infringement at Kashagan.

The consortium said it signed a new memorandum with Kazakhstan that would extend the deadline for completing negotiations into early 2008. Both sides had previously aimed to close the deal by Dec. 20.

Emboldened by sky-high oil prices, Kazakhstan has intensified pressure on the group to secure itself a larger stake in the field -- the world's biggest oil find in 30 years.  Continued...

 

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