PrintA deepening dispute over the world's largest recent oil find is raising fears among western mineral extraction firms and governments of a reversal in their preeminent position in Kazakhstan, as voracious Asian powers scramble to secure their own economic futures.
International companies continue to jostle for position in the contest for access to Kazakhstan's diverse mineral deposits amid an ongoing dispute over the world's largest recent oil find.
On 20 September, Kazakh Energy Minister Sauat Mynbaev held a meeting with EU Energy Commissioner Andris Piebalgs to discuss the ongoing dispute between his government and an international oil consortium headed by Italy's Eni SpA over the huge Kashagan oil field.
The dispute centers on the failure of the consortium to keep to exploration and production plans elaborated in the group's contract with the Kazakh government.
Astana is keen to see the giant submarine oil field come into production as quickly as possible. It is also keen to renegotiate a more favorable deal that would allow President Nursultan Nazarbayev's government to temper its failure to institute meaningful civil reforms through further boosting development and economic growth. Economic growth is currently running at 10 percent per annum.
Recognizing the significance of growing tensions with Astana, fellow Eni consortium members Exxon-Mobil and Royal Dutch Shell have sought a greater role in developing the field. However, they now must await the result of negotiations between the newly installed Kazakh government and consortium EU and Italian officials.
Their intervention was too little too late with the government freezing operations at Kashagan for three months in August, citing the alleged violation of environmental-protection laws, cost overruns and repeated delays, RFE/RL reports.
The initial cost estimate of US$57 billion has ballooned to US$136 billion. Oil executives have admitted that projections were grossly underestimated in their initial contract bid, the International Herald Tribune reports.
On 13 September, a coalition of NGOs called on the European Commission, Italian government and other financing organizations to conduct a full study of the environmental impact of current consortium activities at Kashagan before pushing for work to resume. Following a fact-finding mission, the coalition claimed that sulfur and other poisonous gas emissions posed a significant threat to neighboring communities, New Europe reports.
In 1999, Kashagan, situated deep under the Caspian Sea, was confirmed as the largest single oil find in close to three decades, and the fourth to fifth largest known field.
Production has been repeatedly delayed by logistical and technological challenges and a shortage o
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