Kazakh Energy Minister Sauat Mynbayev said Monday that U.S. ExxonMobil's (XOM) conditions to resolve a dispute over the giant Kashagan oil field was risky for Kazakhstan and differed from the rest of the Eni SpA-led (E) consortium, Interfax news agency reported. "They (ExxonMobil) say that their terms and conditions are different from those of the other (consortium members)," Sauat Mynbayev was quoted by Interfax as saying. "In principle they (ExxonMobil) do not object but the terms and conditions are different and such an approach to the project entail risks."
Mynbayev said that Kazakhstan would be satisfied with a 16% stake of the state oil and gas company KazMunaiGas in the Kashagan project, Interfax reported. KazMunaiGas currently holds 8.33% in the consortium developing Kashagan.
He said that the talks to resolve the dispute had been extended until Jan. 15, the agency said.
Kazakhstan has sought to increase KazMunaiGas share in Kashagan and an "adequate" compensation as ways to resolve the dispute over rising costs and repeated production delays at the field.
The consortium said Friday that it had signed a memorandum with Kazakhstan that is a "step forward" toward an amicable settlement. The new, unspecified terms need to be confirmed by early 2008 at the latest, the consortium said.
Italy 's Eni, the sole Kashagan operator, holds an 18.5% stake in the development consortium, the same as ExxonMobil Corp., Royal Dutch Shell PLC (RDSB.LN) and Total SA (TOT). ConocoPhillips (COP) holds 9.3%, while Japan 's Inpex Holdings Inc. (1605.TO) and Kazakhstan 's state oil company KazMunaiGas each own 8.3%.
All members of the group have agreed to pay Kazakhstan between $2 billion and $4 billion in compensation, as well as agreeing to keep Eni as the operator of the project, a person familiar with the matter told Dow Jones Newswires later Friday.
The person, who asked not to be named, said only ExxonMobil out of the consortium members didn't agree with doubling KazMunaiGas' stake or bringing it to a level equal to the biggest investors in the project.
An ExxonMobil spokesman said Friday that the company doesn't oppose a larger stake for Kazakhstan , but declined to address other questions about the talks.
"ExxonMobil is not opposed to KMG (KazMunaiGaz) increasing its equity and continues to work with the Republic of Kazakhstan to seek an amicable solution on the appropriate value for the equity," said ExxonMobil spokesman Gantt Walton in an e-mail statement.