KZBlog

After this great article on potential directions an agreement with Eni might take in Kashgan by Ben, it appears a settlement has been reached. KazMunaiGas, the state oil company, will have its share of the project increased “equal to that of the largest shareholders,” according to a statement from KazMunaiGas. According to the AFP report:

Previously, Italy’s ENI, France’s Total, US ExxonMobil and Dutch-British Shell each held an 18.52-percent stake. ConocoPhillips, also of the United States, owned 9.26 percent while Japan’s Inpex and Kazakh state energy company Kazmunaigas each held 8.33 percent.

US business daily the Wall Street Journal on Monday quoted a source close to the negotiations as saying that ENI, Total, ExxonMobil and Shell would now see their stakes fall to 16.6 percent, while Kazmunaigas’ stake would rise to the same level.

The paper said Kazmunaigas had paid 1.78 billion dollars (1.2 billion euros) to increase its stake.

The Kashgan oil field is the only Caspian Sea project in Kazakhstan. No oil has been pumped out of it yet, but the original plan to have it online by 2011 may still be realized. Some predict that the Caspian Sea oil may give Kazakhstan the second or third largest oil reserves in the world, but no one knows how much oil is really down there. The project is high profile enough that the Prime Minister of Kazakhstan, Karim Massimov met with Eni officials over lunch on Sunday, and President Nazarbayev met with the head of Eni several months ago. Both leaders were apparently confident an agreement could be met without drastic measures like forcing Eni to withdraw or penalize them with heavy fines. And apparently that has happened!