Kazakhstan says Exxon stalling Kashagan talks

Business Materials 24 December 2007 11:56 (UTC +04:00)

( Reuters ) - Kazakhstan and an Eni-led (ENI.MI) consortium of oil majors have set January15 as the new deadline for talks over the fate of the giant Kashagan oilfield, Kazakh energy minister Sauat Mynbayev said on Monday.

The Central Asian state is seeking a cash payment and a stake increase as compensation for cost overruns and delay in the start of production at the world's largest oil find in the last 30 years.

"We have agreed with everyone but Exxon," Mynbayev told reporters.

Exxon said last week it was not against cutting its stake in favor of Kazakh state company KazMunaiGas (KMG.UL), but had its own view on valuing the deal.

Mynbayev said Kazakhstan did not like Exxon's offer.

"Such an approach bears risks for the project," he said.

Sources familiar with the talks said last week the group had already agreed to pay Kazakhstan between $2 billion and $4 billion cash and change the profit distribution formula in favor of the government.

Operator Eni, Royal Dutch Shell (RDSa.L), Total (TOTF.PA) and ExxonMobil (XOM.N) have 18.52 percent in Kashagan each.

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

The Caspian Sea 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. Its total costs have soared to $136 billion from $57 billion.