MILAN (Thomson Financial) - The Kazakh government has asked for changes to
the memorandum of understanding with the international consortium led by Eni SpA
to develop the Kashagan oil field, daily Il Sole 24 Ore said, citing sources
close to the deal.
The paper said the clause in the memorandum regarding royalties due to the
Kazakh government had been altered.
Oil prices have doubled since the memorandum was signed on Jan. 14, Sole
said.
Eni CEO Paolo Scaroni recently said changes are possible until the January
agreement is officially incorporated into the production sharing agreement
between the sides.
Il Sole said the start of production at the Kashagan oil field has been
repeatedly delayed and could now be 2012 if not 2013.
The paper said costs might well have risen above the $136 billion recently
estimated by the Kazakh government.
According to the paper, the consortium has been forced to accept recent
variations to the memorandum because of the delays to the project and the
above-budget costs.
Under the memorandum, Kazakh state-run energy company Kazmunaigaz will boost
its share in Kashagan to 16.81 percent from 8.33 percent.
The Western partners of the consortium -- Eni, Total, Exxon Mobil and Royal
Dutch Shell -- will each cut their stakes from 18.52 percent to 16.81 percent.
Other members of the consortium are ConocoPhillips and Japan's Inpex.
stephen.jewkes@thomsonreuters.com
sj/ms1
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