Kazakhstan not eyeing stake in huge gas field -min

Jan 26. Reuters. ASTANA

* Kazakhstan does not want stake in Karachaganak
* Says main issue is cost, third phase

Kazakhstan is not in talks to buy a stake in the huge Karachaganak gas field operated by a consortium of Western energy majors, the energy minister said on Tuesday, contradicting earlier remarks by the government.

The Central Asian state has said it wants a stake in the project whose operators have accused Kazakhstan of levying extra duties on them. Karachaganak is Kazakhstan’s main gas producer and holds large gas condensate reserves.

It is operated by a consortium that includes BG (BG.L), Eni (ENI.MI), Russia’s LUKOIL (LKOH.MM) and U.S. Chevon (CVX.N).

Speaking on Tuesday, Energy Minister Sauat Mynbayev said buying a stake was not on the agenda.

“We are not holding talks about buying a stake as such,” he told reporters. “As usual, we are trying to sort out cost issues, issues on the third phase. We have questions for them and they have questions for us.”

Prime Minister Karim Masimov said in late December that talks on buying a stake were under way.

The dispute, which started last year, has rekindled memories of an earlier row between the government and a group of Western oil companies over another big project, the Kashagan oilfield – the world’s biggest oil discovery in decades.

In that standoff, Kazakh state oil company KazMunaiGas ended up doubling its interest in Kashagan, in a case analysts said was part of a global trend by governments to reclaim control over strategic energy assets.

Karachaganak, in western Kazakhstan, holds 1.2 billion tonnes of oil and gas condensate and 1.35 trillion cubic metres of natural gas.