Kazakhstan in Talks Over Karachaganak Field Stake
ALMATY, Kazakhstan (Dow Jones), Dec. 29, 2009
The Kazakhstan government is in talks with a BG Group PLC-led consortium over obtaining a stake in the Karachaganak development, one of Kazakhstan's largest oil and gas condensate fields, Kazakh prime minister Karim Masimov said Tuesday.
"Currently, talks on this issue are ongoing between the energy ministry, [Kazakh state oil and gas company] KazMunaiGas and all the project participants," Masimov said when asked whether Kazakhstan planned to join the consortium developing Karachaganak, according to his spokeswoman. He didn't provide further details.
A government stake in Karachaganak could help resolve the current dispute over export duties between the consortium and oil and gas rich Kazakhstan, which has moved to boost its control over major natural resource projects in recent years.
The consortium, Karachaganak Petroleum Operating, is seeking compensation for export duties it says it shouldn't have had to pay to the government under its final production-sharing agreement.
The government has said the consortium has been seeking, through international arbitration, a refund of over $1 billion for oil export duties it has already paid.
The consortium is comprised of the U.K.'s BG Group, Italy's Eni SpA, U.S. oil major Chevron Corp. and Russia's Lukoil Holdings.
BG Group, Eni and Lukoil declined to comment, while a representative for Chevron was not immediately available for comment.
Karachaganak is the only large Kazakhstan oil and gas field which in which the government doesn't have a stake. The field holds more than 1.2 billion metric tons of oil and condensate and over 1.35 trillion cubic meters of gas, according to the consortium's Web site.
The Kazakh government doubled its stake in Kashagan--set to become Kazakhstan's largest oil-producing field--to 16.8% in 2008, following a dispute with the Eni-led consortium over costs and production delays. KazMunaiGas has a 20% stake in Chevron-led Tengizchevroil, Kazakhstan's largest producing oil field.
Copyright (c) 2009 Dow Jones & Company, Inc.
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