Kazakhstan to review Kashagan PSA: energy minister

By Maria Golovnina

ALMATY (Reuters) - Kazakhstan will review its deal with Western oil firms developing the Kashagan field to reflect agreements reached last month to end a row over the project's future, a senior official was quoted as saying on Wednesday.

Kazakh Energy Minister Sauat Mynbayev told the Vremya newspaper the government would incorporate the changes into the Kashagan Production Sharing Agreement (PSA) by October15.

"Yes, that is what we are planning to do. The agreement which we have reached, and which is reflected in the memorandum of understanding signed by both sides, will have to be incorporated into the PSA by October15," he told the paper.

In June, Kazakhstan and the group agreed to hold off the start of production until 2013 after a year of tension over the world's biggest oil discovery in 30 years.

In return, the consortium agreed to prevent further cost overruns, pay floating royalties linked to the oil price and have the PSA expire in 2041.

The consortium unites Eni, Royal Dutch Shell Plc, Exxon Mobil Corp, Total, ConocoPhillips, Kazakh state oil company KazMunaiGas and Japan's Inpex Holdings Inc

The move to fix Kashagan's PSA comes in the light of a broader strategy by the Kazakhstan government to abandon subsoil contracts favored by oil companies due to their liberal tax regime and raise taxes in the energy sector.

Analysts say the oil-rich nation is growing in its resolve to exert more control over its resources following the first post-Soviet decade when Kazakhstan, its economy in tatters, lured foreign investors with tax breaks and sky-high returns.