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KMG: Situation around Karachaganak is solvable through talks

Oil&Gas Materials 12 March 2010 13:44 (UTC +04:00)
The situation around the project Karachaganak is solvable through talks and compromise, Maksat Idenov, Chief Executive Director and Member of the Management Board at Joint Stock Company KazMunayGas said . “Talks and search for compromises are the main directions to resolve the situation,” Idenov said.

Baku, Azerbaijan, March 12 / Trend , S. Suleymanov /

The situation around the project Karachaganak is solvable through talks and compromise, Maksat Idenov, Chief Executive Director and Member of the Management Board at Joint Stock Company KazMunayGas said . "Talks and search for compromises are the main directions to resolve the situation," Idenov said.

In late September, a major shareholder of the project - BG Group filed a suit in London Court of Arbitration for return of illegal, export payments. But in October, the company has suspended legal action against Kazakhstan.

"On the other hand, in what we can be blamed: zero in the business, zero in the management, zero in the transportation, but the price we compensate the shareholders is enormous," Idenov said.

According to him, "there are serious reasons for inclusion of Kazakhstan in this project."

This week, Executive Secretary of the Ministry of Energy Kanatbek Safinov after the presentation of the draft law "On Subsoil and Subsoil Use" in the Senate made it clear that Kazakhstan intends to enter and become a partner in the project Karachaganak.

Earlier at a press conference in Astana, the head KazMunaiGaz head KazMunaiGaz Kairgeldy Kabyldin said presently, the shareholders of the project and the KMG are in talks, and KMG is interested in the project.

According to experts, Karachaganak field contains more than 1.2 billion tons of oil and more than 1.35 trillion cubic meters of gas. BG Group and Eni are operators of the project. Each company owns a 32.5 percent stake in Karachaganak Petroleum Operating. American Chevron controls 20 percent stake, and Russia's Lukoil owns 15 percent share in the field.

The consortium operates in accordance with the final Production Sharing Agreement (FPSA) signed with the KazakhGovernment in November 1997.

Under the agreement, the consortium will manage the Karachaganak project in the period up to 2038. No new taxes and fees are applied on its members.

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