ALMATY, Kazakhstan Dec 06, 2007 (Dow Jones Newswires)
Kazakh Prime Minister Karim Masimov Thursday defended his government's right to intervene in natural resources contracts if investors violate their terms or try to sell their resources business.
"I believe that stability of contracts is a necessary and inviolable element just like the right to private property," Karim Masimov said according to a report posted on his government's Web site. "But in case an investor violates an agreement, then the government has the right to review it."
Masimov said that the government also has a right to intervene if an investor sells its natural resources business, without specifying in what way the government could do that.
Kazakhstan recently adopted an amendment to its subsoil law allowing the government to intervene or cancel natural resources contracts if it sees any threat to the country's national security.
The amendment was adopted following the dispute between the Central Asian state's government and a consortium led by Italy's Eni SpA (E) developing the giant Kashagan oil field in the Caspian Sea. The dispute started over rising costs and production delays.
Masimov said he was hopeful that the ongoing dispute between Kazakhstan and the Kashagan consortium would be resolved soon.
Dec. 20 is the new deadline for the consortium and the Kazakh government to end talks aimed at resolving the dispute.
Kazakh state oil and gas company KazMunaiGas, or KMG, said Sunday that all but one member of the Eni-led consortium developing the giant Kashagan field have agreed in principle to transfer parts of their stakes to the Kazakh energy firm to raise its stake to the level of other major shareholders.
Kazakh Energy Minister Sauat Mynbayev Tuesday was reported to have said that U.S. energy company ExxonMobil Corp. (XOM) was the consortium member refusing to give up part of its stake for KMG.
Eni, the sole Kashagan operator and Italy's biggest oil and natural gas company by volume, holds an 18.5% stake in the development consortium, the same as ExxonMobil, Royal Dutch Shell PLC (RDSB.LN) and Total SA (TOT). ConocoPhillips (COP) holds 9.3%, while Japan's Inpex (1605.TO) and Kazakh state-owned oil company KazMunaiGas each own 8.3%.
Copyright (c) 2007 Dow Jones & Company, Inc.
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