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Tuesday, October 23, 2007

ExxonMobil 'stalling Kashagan talks'

22 October 2007 - Upstream OnLine - ExxonMobil is blocking the expansion of the Kazakhstan's share in the Kashagan oilfield, stalling talks between the Kazakh government and the Eni-led AgipKCO consortium which is developing the Caspian Sea field, according to Russian media reports. The Interfax news agency quoted unidentified sources as saying all other foreign members of the AgipKCO consortium had agreed on a preliminary deal which would see Kazakh state-run company KazMunaiGaz raise its stake in the project from its current 8.33% holding. The proposed compromise, under which all consortium members would proportionally reduce their stakes, could settle a dispute over cost overruns and delays at Kashagan. Interfax said KazMunaiGaz' stake could double if ExxonMobil were given the final nod. ExxonMobil has a 18.52% share in the consortium, while project leader Eni, Shell and Total have stakes of similar size. Smaller stakes belong to ConocoPhilips, with 9.26%, and Japan's Inpex, with 8.33%. Many partners, including Total, have called for a swift resolution, saying a deal should be reached by the end of the year. Eni has said the group is discussing the idea of increasing Kazakhstan's role in the development but has given few details. Kazakhstan has threatened to strip Eni of its leading role at Kashagan as it negotiates a new budget, which may exceed $100 billion, and timetable for pumping crude. Kazakhstan has said securing a bigger stake in Kashagan is not its main goal but it simply wants the field to come on stream as soon as possible as the country seeks to triple its oil production. Kashagan's start up has been repeatedly delayedned and is not expected before 2011 or 2012. The field is due to produce about 1 million barrels per day when it reaches peak output several years later.

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