ALMATY, Kazakhstan (Dow Jones)--Eni SpA-led (E) consortium members developing the giant Kashagan field in Kazakhstan signed an "interim" memorandum Friday but have failed to agree on a final solution to the ongoing dispute, a source familiar with the talks told Dow Jones Newswires.
The source said that the memorandum was "only interim" and would take the talks beyond Friday. Further details were unknown, the person said.
Dec.20 marked the third missed deadline to resolve the dispute and decide on new terms for Kashagan, the offshore oilfield in the northern Kazakhstan section of the Caspian Sea. The previous deadlines were Oct. 22 and Nov. 30.
In November, all consortium members but one had agreed in principle to transfer part of their stakes in the consortium to KazMunaiGas as part of the resolution. U.S. energy company ExxonMobil (XOM) was reported to have been the defiant consortium member.
Kazakhstan has been angry with the consortium over rising costs production delays at Kashagan and has demanded an increased stake for Kazakh state oil and gas company KazMunaiGas as compensation.
Kazakh officials also claimed the total costs of the project had jumped to $136 billion from $57 billion, meaning the date for payments reaching the public coffers would be pushed back.
Under the production sharing agreement, companies have preference in recouping their investment.
The official production start date is now the third quarter of 2010 from the original 2005 deadline.
Eni, the sole Kashagan operator, holds an 18.5% stake in the development consortium, the same as ExxonMobil, Royal Dutch Shell (RDSB.LN), Total SA (TOT), and ConocoPhillips (COP) each hold 9.3%, while Japan's Inpex Index Inc. (1605.TO) and KMG each own 8.3%.