Kazakh ministry denies Kashagan suspension plan

ASTANA, Nov 7 (Reuters) - Kazakhstan's environment minister denied on Wednesday that he sought to suspend activities at the giant Kashagan oilfield if a consortium of Western oil companies developing it did not comply with ecological requirements.

Kazakhstan is locked in a row with Italy's Eni (ENI.MI) and its partners developing the world's biggest oil find in three decades, and has accused them of ecological and other violations. "Environmental Protection Minister Nurlan Iskakov denied information that appeared on news Web sites that his ministry aims at suspending the activities of the AgipKCO consortium," it said in a statement.

"The minister ... said that the question of AgipKCO's suspension in Kazakhstan is not currently being discussed."

Domestic and foreign media had reported remarks made by the minister at a Tuesday meeting with parliament deputies about a suspension of activities in the oilfield.

"If no consensus is found by that point (late November), especially on matters of our jurisdiction, then, in accordance with environmental legislation, we retain our right to stop all emissions produced by this enterprise through court. This means that this project will be suspended," he was reported to have said at the meeting, which was also attended by media.

Energy Minister Sauat Mynbayev, a key participant of Kashagan talks, said last month the sides were ready to work out a compromise on ecology and that it was not the main problem.

Kazakhstan has accused the consortium of failing to come up with a detailed proposal on how it plans to handle sulphur stocks as well as its plans to preserve the ecology of the Caspian Sea during oil extraction and transportation.

The country has formally set Nov. 30 as the final deadline in its talks with the consortium. Kazakhstan is angry that the project has been delayed until after 2010 and wants a bigger role for state oil company KazMunaiGas. (Reporting by Raushan Nurshayeva; Writing by Maria Golovnina in Almaty; Editing by Valerie Lee)