Kazakhstan in talks to own stake in oil field

April 25. MarketWatch. ROME

By Liam Moloney

Kazakhstan in talks to own stake in oil fieldKazakh authorities are in talks with a consortium led by BG Group PLC (BG.LN) and Eni SpA (E 47.71, +0.76, +1.62%)  to acquire a stake in the Karachaganak oil and natural gas field, Italian daily Il Sole 24 Ore reported Saturday, without citing its source.

The parties are holding talks in London, but there hasn’t been progress in allowing Kazakhstan to enter the consortium Karachaganak Petroleum Operating BV, or KPO, says the newspaper.

Eni Chief Executive Paolo Scaroni, on the sidelines of the Assicurazioni Generali SpA’s (G.MI) annual shareholders’ meeting in Trieste, declined to comment Saturday. Scaroni is a board member at Generali.

Karachaganak is also owned by Chevron Corp. (CVX 82.67, +1.47, +1.81%) and OAO Lukoil Holdings , and is the only major field in Kazakhstan in which the Caspian state doesn’t have a holding.

Last month, Kazakhstan’s financial police launched a criminal probe into Karachaganak, examining over-production of oil and gas from the project.

The financial police said in 2008 the consortium produced 1.1 million metric tons of oil, and 94,000 tons of gas condensate, which is above the approved quota, worth around 104 billion tenge ($708 million).

KPO said then in a statement that it was cooperating with the authorities, but declined to comment on details of the case.

In February, Claudio Descalzi, the head of Eni’s exploration and production division, wouldn’t rule out the Kazakh state-owned oil company KazMunaiGas taking a stake in Karachaganak.

The Kazakh government doubled its stake in the Kashagan project-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.

http://www.marketwatch.com/story/kazakhstan-in-talks-to-own-stake-in-oil-field-2010-04-25

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