KAZAKHSTAN: President Nursultan Nazarbayev says his country will demand cash compensation or bigger state stake in Kashagan oil group

Record ID: 343922

  • Title: KAZAKHSTAN: President Nursultan Nazarbayev says his country will demand cash compensation or bigger state stake in Kashagan oil group
  • Date: 12th December 2007
  • Summary: WIDE OF KAZAKHSTAN'S PRESIDENT NURSULTAN NAZARBAYEV ENTERING FOREIGN INVESTORS COUNCIL MEETING/ OFFICIALS SITTING DOWN TO BEGIN MEETING VARIOUS OF FOREIGN INVESTORS COUNCIL MEETING KAZAKH FLAG FOREIGN INVESTORS COUNCIL PARTICIPANTS AND PRESIDENT NURSULTAN NAZARBAYEV POSING FOR CAMERAS PHOTOGRAPHERS TAKING PICTURES WIDE OF KAZAKH PRESIDENT NURSULTAN NAZARBAYEV AT NEWS CON
  • Embargoed: 27th December 2007 12:00
  • Keywords:
  • Location: Kazakhstan
  • Country: Kazakhstan
  • Topics: International Relations
  • Reuters ID: LVABCIT5W0LWBSWJ0QL1D7IWK15P
  • Story Text: Kazakhstan will demand either cash compensation or a bigger state stake in the Kashagan oil group to settle a dispute with the Eni-led consortium, Kazakhstan's president said on Friday (December 7).
    The country has accused the consortium developing the huge Caspian Sea Kashagan oilfield of various violations, including environmental damage, and has blamed its management for allowing costs to spiral and delaying the start of production.

    "Our government is holding talks with everyone to achieve a solution and come to an agreement peacefully," President Nursultan Nazarbayev told reporters.

    "We are not talking about abandoning the contract. Both sides are looking for an opportunities to settle a dispute," he added.

    "There are different ways (of settling) the matter: either (paying) the sum we have set, or Kazakhstan raises its participation. We will solve this matter in a way all sides can be happy," he added.
    A source close to the talks said last week that Kazakhstan was seeking more than 7 billion U.S. Dollars (USD) in compensation for the delays.
    The Kashagan field is at the heart of Kazakhstan's ambition to triple oil output by 2017. It is now due to start pumping oil in 2010, instead of the original 2005 target.
    The dispute has been escalating for several months and talks hit a snag last week after Kazakhstan said U.S. oil giant Exxon Mobil was against a settlement plan.
    Operator Eni, Royal Dutch Shell, Total and Exxon have 18.52 percent in Kashagan each. Smaller stakes belong to ConocoPhilips , with 9.26 percent, and Japan's Inpex, with 8.33 percent.
    Kazakhstan has suggested the consortium members cut their shareholdings and significantly raise state oil company KazMunaiGas's 8.3 percent stake in Kashagan, one of the world's largest oil discoveries in the past decades.
    ENDS.
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