Exxon blocks deal on bigger Kazakh Kashagan stake

MOSCOW, Oct 20 (Reuters) - Talks between Kazakhstan and oil companies developing the giant Kashagan field have stalled as U.S Exxon Mobil (XOM.N) is blocking the expansion of the state's share in the project, Interfax news agency said on Saturday.

The agency quoted unidentified sources as saying all other foreign members of the Kashagan group had agreed on a preliminary deal under which state energy firm KazMunaiGas would raise its stake in the project from 8.33 percent now.

The proposed compromise, under which all group members would proportionally reduce their stakes, could settle a dispute over cost overruns and delays at Kashagan, one of the world's largest oilfield developments.

Interfax said KazMunaiGas's stake could double if Exxon were given the final nod. Kazakh officials and the oil companies could not be reached for comment on the report from Astana, capital of the Central Asian state.

Exxon has 18.52 percent of Kashagan, alongside project leader Eni (ENI.MI) as well as Royal Dutch Shell (RDSa.L) and Total (TOTF.PA), which have stakes of similar size.

Smaller stakes belong to ConocoPhilips (COP.N), with 9.26 percent, and Japan's Inpex (1605.T), with 8.33 percent.

Many partners, including Total, have called for a swift resolution, saying a deal should be reached by the end of the year. Eni has said the group is discussing the idea of increasing Kazakhstan's project role but has given few details.

Analysts have compared the development to similar moves by Russia, which last year ousted Shell from the leading role in the giant Sakhalin-2 liquefied natural gas project. Shell and its partners sold control to state-controlled Gazprom (GAZP.MM).

Kazakhstan has threatened to strip Eni of its leading role in Kashagan, the biggest oil find in three decades, as it negotiates a new budget, which may exceed $100 billion, and timetable for pumping crude.

Kazakhstan has said securing a bigger stake in Kashagan is not its main goal but it simply wants the field to come on stream as soon as possible as the country seeks to triple its oil production.

Kashagan's startup has been repeatedly postponed and is not expected before 2011 or 2012. The field is due to produce about 1 million barrels per day when it reaches peak output several years later.

This month, Kazakhstan said it had been forced to revise the country's total output forecast downwards and it would not achieve the projected target of 3 million bpd by 2015.