- ALMATY/DOHA: Kazakhstan and the owners of the Karachaganak oil and gas field expect to sign a deal next week to transfer a 10 percent stake in the project to the state in return for $1 billion and withdrawal of legal claims, two sources close to negotiations told Reuters.
Consortium members BG Group, Eni, Chevron and Lukoil will sell stakes on a pro-rata basis to allow the Central Asian state to enter the project, said one of the two sources and a third source close to the negotiations.
"Everything major that has been a bone of contention will go away," one of the three sources said on Friday. All of the sources spoke on condition of anonymity because of the sensitivity of the matter.
Kazakhstan, Central Asia's largest economy, has become more assertive over its natural resources in recent years and has sought to revise agreements struck with foreign energy companies when it lacked cash after the Soviet Union's demise.
The government has long expressed a desire to join the international consortium that operates the Karachaganak field in northwestern Kazakhstan, which contributes 49 percent of the gas produced by the country and 18 percent of its crude oil.
"We expect the leaders of the consortium to be invited to Astana no later than Dec. 16," one of the sources said. A second source said the signing was scheduled to take place on Dec. 14.
BG Group and Eni are the biggest shareholders in the Karachaganak consortium, holding 32.5 percent each. US major Chevron has 20 percent and Russia's Lukoil has 15 percent.
Two of the three sources said that Kazakhstan would pay $1 billion for a 5 percent stake in the project and, in return for the other 5 percent, at least some of its legal claims against the operators of the project would be dropped.
"The agreement to resolve this dispute proposes the removal of mutual arbitration claims," one source said.
The government, which says it wants to exercise control over costs for the Phase Three development of Karachaganak, has brought several cases against the operators, accusing them of overstating costs and violating tax and ecological laws.
These claims have included the preparation of back-tax claims against the Karachaganak Petroleum Operating Group (KPO) consortium.
The sources declined to be more specific about which cases would be dropped or whether any outstanding claims would remain.
BG declined to comment on the signing of any deal. The company said it and the other consortium partners had been in "protracted discussions" with the Kazakh government to resolve their disputes and develop the Karachaganak project.
"We believe we are on the right path to reaching a beneficial resolution for all parties but as yet we have not concluded our discussions," the company said.
"We have maintained that resolution of these issues by the end of this year would be a good result but it is far more important to get the detail right rather than simply hit an arbitrary date," it said.
Eni declined to comment.

