Investors will pay Kazakhstan for Kashagan and share with stocks

/REUTERS, Moscow - Milan - Alma-ata - New York, December 21, 07/ - After several months of negotiations between consortium of foreign investors and powers of Kazakhstan about fate of large oil-gas Kashagan field businessmen leaded by Eni and Exxon Mobil had come for compromise, agreeing to pay the huge penalty to the state and give the state company Kazmunaygas additional stake in the project. These two requirements were the main from the side of Kazakhstan, which in August was threaten to Italian Eni heading the consortium with recall of permission for mastering of Kashagan due to damage to ecology and then concentarted on claims due to delays of turning of the field to exploitation and increasing of charges' estimate. Participants of the consortium explained the delay with start of extraction by technological barriers, which also had lead to doubling of charges on first stage of project to $19 bn. Astana was insisted on advancing of moment of profit extraction from $57 bn. project and increase its stake in it. With money and shares Soon after advancing of first claims Kazakhstan in one side order had stopped the development of project, and in informal talks many sources told that the country is claiming from consortium of money compensation for delays in size of up to $10 bn. Foreign companies were denying for a long time that they are ready to pay for right to participate in dividing of resources of the largest field, opened for the last thirty years. However as the result, as the source close to negotiations informed ion Friday, consortium will pay to Kazakhstan in money form from $2 bn. to $4 bn. as compensation. Except this, businessmen will share the stake in project with Kazakhstan state oil-gas company Kazmunaygas, which will increase the shareholding to 16% from 8.33% by shares of other participants, the source told. Exxon, which earlier was principally against of increase of Kazmunaygas' stake, had agreed with this scheme, confirmed the representative of the company. Nevertheless, it won't sell its shares, is evident from words of the source. Thus, Kazmunaygas will almost equalize the participation in Kashagan with largest holders - Eni, Exxon Mobil, Royal Dutch Shell and Total, to which belong 18.5% each, though it won't become the second leader of the project, about which was spoken on negotiations in teh autumn. Minority shareholders of Kashagan were ConocoPhillips with 9.3% and Japanese Inpex with 8.3%. It is unknown how much the stakes of participants will lessen in favor of Kazmunaygas. From the other side, the reached agreement do not foreseen the immediate payment of penalty by consortium, the other source, familiar to results of discussion told. By his words, sides also "agreed upon new formula of calculation of profitable oil", due to what net discount cost of project reduces "by several billions of dollars". Long winter in Kashagan Nevertheless, yet all messages about details of reached compromise are carrying informal character. Eni had only announced that discussion have to be finished in the beginning of year 2008 and sides had signed new memorandum, supposing "friendly regulating" of same problems. Previous dead-line had expired on December 20. "Not later than beginning of year 2008" participants of negotiations have to confirm new terms of Kashagan development, follows from the message of Eni. Kazakhstan not for the first time is achieving more profitable terms of development of local fields from foreign investors by lay down of claims. In year 2002 powers and group of companies headed by Chevron, extracting oil on Tengiz field, had divided in opinion how to finance the widening of project. After that the court had fined company for $71 m. for preservation of sulfur under opened sky. However later, when government and foreign partners had reached the compromise the penalty was reduced 10 times. Claims of Kazakhstan government to western investors are similar to behavior of Russian powers, where operator of Sakhalin-2 Royal Dutch Shell had meet the ecological claims and had to concede control to state Gasprom. The same as Russia, Kazakhstan signed agreements with foreign oil giants in 1990 years, having the need of funds for rebirth of economy. [2007-12-24]