Kazakhstan's Ten-Billion-Dollar (in penalties) Field
When Russia asserted its rights against Western oil companies working there, it looked for local control of its oil and natural gas fields. In the permutation of that trend in Kazakhstan, the language of negotiation is not just control, but big cash.
Reuters has nailed down the approximate compensation that Kazakhstan wants before lifting its suspension of development of the much-delayed supergiant Kashagan oilfield. "Certainly it will be more than $10 billion,"Daulet Yergozhin , Kazakhstan
Kazakhstan suspended work on the field last week, claiming environmental violations. Negotiations with the Italian-led consortium begin tomorrow (Wednesday).
Steve's comment: The outlines of the Kazakh demands, which have leaked out in dollops over the last few days, are breathtaking. If Yergozhin actually is speaking for the Kazakhs -- he may simply be floating trial balloons on behalf of the far larger figures behind him -- the talks are not going to be as easy as the Italians have suggested publicly.
The oil companies no doubt have been thinking of compensation in the neighborhood of a few hundred million dollars tops. Look for them also to oppose a suggestion by Yergozhin, published last week in The Wall Street Journal, that Kazakhstan be given joint or sole operatorship of the field.
Reuters has nailed down the approximate compensation that Kazakhstan wants before lifting its suspension of development of the much-delayed supergiant Kashagan oilfield. "Certainly it will be more than $10 billion,"
Kazakhstan suspended work on the field last week, claiming environmental violations. Negotiations with the Italian-led consortium begin tomorrow (Wednesday).
Steve's comment: The outlines of the Kazakh demands, which have leaked out in dollops over the last few days, are breathtaking. If Yergozhin actually is speaking for the Kazakhs -- he may simply be floating trial balloons on behalf of the far larger figures behind him -- the talks are not going to be as easy as the Italians have suggested publicly.
The oil companies no doubt have been thinking of compensation in the neighborhood of a few hundred million dollars tops. Look for them also to oppose a suggestion by Yergozhin, published last week in The Wall Street Journal, that Kazakhstan be given joint or sole operatorship of the field.
3 Comments:
Looks like it's become a real trend:
Repsol runs into the sand in Algeria
http://www.msnbc.msn.com/id/20592150/
Well, looks like Kazakhstan has big plans and will need big money. They've made up their minds to go ahead with adopting Latin alphabet. The minimum cost: $300 million:
http://eurasianet.org/departments/insight/articles/eav090407.shtml
That Algeria story is very good contextually. Thanks Alex for passing that on. It's like the 1970s again. When oil prices plummet, however, which they will sooner or later, these same countries will be cozying up to the majors.
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