Kazakhstan: Karachaganak negotiations underway

Oil&Gas Materials 27 August 2010 11:46 (UTC +04:00)

Kazakhstan, Astana, Aug. 27 / Trend S.Suleymanov /

Kazakhstan is continuing to negotiate its share of the Karachaganak project with the international consortium tasked with developing the field. The parties have not yet agreed on the state's share in the project, Kazakh Oil and Gas Ministry Executive Secretary Kanatbek Safinov told Trend.

"Reports that we have agreed to a 10-percent share in the Karachaganak project are no more than rumors," Safinov said. 

Earlier, Reuters reported that the Karachaganak Petroleum Operating B. V. consortium agreed to cede a 10-percent share in the massive energy project to the Kazakh government. The project includes developing the country's largest oil and gas field, Karachaganak.

Reuters reported that the parties have already agreed to transfer a five-percent stake in the project to the government if the authorities rescind earlier accusations of fraud against the consortium. The news agency added that the government will also receive the right to purchase a second five-percent share for cash.

"We have not agreed to this proposal - especially to acquiring five percent for 'cash,'" Safinov said. "Negotiations are underway. A final decision has not yet been reached."

The BG Group and Eni are the project's operators. Each company owns a 32.5-percent stake in Karachaganak Petroleum Operating. Chevron owns a 20-percent stake, and a 15-percent share is also owned by Lukoil.

Previously, Kazakhstan demanded $1.3 billion from BG and Eni in an international arbitration court. The government filed a criminal case against the consortium's management, accusing its leadership of fraud.

According to experts, Karachaganak has over 1.2 billion tons of oil and 1.35 trillion cubic meters of gas. About 49 percent of Kazakhstan's gas and 18 percent of the country's oil are produced on the field.