11:08 GMT +319 December 2018
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    Kazakhstan to continue talks on giant oil field until Jan. 15

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    ASTANA, December 24 (RIA Novosti) - Kazakhstan and a consortium of companies led by Italy's Eni will continue talks on a massive oil field on the country's Caspian shelf until January 15, the Kazakh energy minister said on Monday.

    "The talks are not yet over, they will continue until January 15," Sauat Mynbayev said.

    The Kashagan field is currently operated by Eni under a production sharing agreement. The Italian oil company, Royal Dutch Shell, Exxon Mobil and Total hold 18.5% each in the project, while ConocoPhillips has 9.3%, and Japan's Inpex and Kazakhstan's KazMunaiGas own 8.3% each.

    In late July, the project operator suggested that the deadline to begin commercial production should be shifted from the second half of 2008 to the second half of 2010, with operating costs increasing from $57 billion to $136 billion.

    In late August, the Kazakh government suspended Eni's license to develop the Kashagan field for three months. The Kazakh Ministry of Environmental Protection said the Eni operations could cause disastrous environmental damage. The Kazakh government also raised the issue of increasing Kazakhstan's stake in the project.

    In mid-December, KazMunaiGas announced that a memorandum of understanding had been signed with the Kashagan consortium. Under the memorandum, all the parties except Exxon had agreed to transfer parts of their stakes in the project increasing the Kazakh government's share, as a compromise over delays and cost rises.

    In line with the compromise, the parties were expected to complete talks by December 20 on the transfer of shares.

    Meanwhile, Daulet Yergozhin, a deputy finance minister of Kazakhstan, said delays in solving the issue were not in the interests of the companies involved in the project.

    "I believe this issue will be solved sooner or later and it will be solved in the interests of the state. We have every chance of safeguarding our position both legally and morally," he said.

    According to the latest estimates, Kashagan's recoverable reserves amount to 7-9 billion barrels of oil.

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