Kazakhstan Renegotiates Oil Deal

Platform, the oil industry watchdog, is today publishing a report that argues that Kazakhstan is missing out on up to $20bn of revenues over the next decade as a result of the problems at the vast Kashagan oilfield.

Kazakhstan agreed surprisingly generous terms in its 1997 contract with international oil companies for developing the field, prompting its much-criticised efforts to renegotiate the deal.

Kazakh officials are currently locked in negotiations with the consortium of companies running the project, which is led by Eni of Italy and includes ExxonMobil, Royal Dutch Shell, Total, ConocoPhillips and Inpex of Japan. A government imposed deadline for an amicable resolution was due to expire last night.

Disagreements within the consortium have complicated negotiations over redrawing the contract terms. Exxon is reluctant to dilute its 18.5 per cent stake, although other members of the group have agreed in principle to surrender shares to KazMunai-gas, Kazakhstan’s state oil company.