Kazakhs Meet With OKIOC to Decide Operatorship

ALMATY, Kazakhstan - The Kazakh government is holding talks with the nine-member OKIOC oil consortium Monday to hammer out a deal on who becomes operator of perhaps the world's largest oil find in 30 years, a government spokesman said.

OKIOC, the Offshore Kazakhstan International Operating Company, discovered oil last July in its first test well at the giant Kashagan field in the Caspian Sea.

The spokesman told Reuters the government delegation at the talks was led by Vladimir Shkolnik, who is both deputy prime minister and minister of energy and mineral resources. The talks are being held in the commercial capital, Almaty.

A senior official at OKIOC said the talks might lead to an operator being named.

"It is correct that there is a meeting with all the principals, or shareholder representatives," he told Reuters. "It's a meeting at which I believe a proposal will be put forward by the shareholders (on the operatorship)".

He said the meeting in Almaty followed a meeting by shareholders in London on Friday. He added that OKIOC had not been informed of the results of those talks by its shareholders, and expected any announcement on the operatorship to come from the Kazakh government.

OKIOC, currently drilling its second test well on the field, has come under pressure recently from President Nursultan Nazarbayev to select an operator.

Nazarbayev said last year that Kazakhstan could produce as much as eight million barrels per day of crude, rivalling Saudi Arabia, by 2015, when the country's three most promising fields, Kashagan, Tengiz and Karachaganak, are all at full production. OKIOC groups Phillips Petroleum, ExxonMobil, BP Amoco, BG plc, Royal Dutch/Shell, TotalFinaElf, Statoil, ENI's Agip and Japan's Inpex.



OWNERSHIP CHANGES

Statoil announced Monday that it had agreed to sell its 4.76 percent stake to TotalFinaElf.

This followed a recent announcement by BP Amoco that it had agreed to sell its 9.5 percent stake in the project to TotalFinaElf, which would give the French group a holding of over 28.5 percent if both deals went through.

But under a shareholder agreement, each partner has a right of first refusal on its share of any stake that comes on the market.

A Kazakh government source said after the BP Amoco deal was announced that this would give TotalFinaElf a real chance of winning the operatorship.

Market rumours have also emerged that Agip was the front runner, but neither Agip's office in Almaty nor the Italian Embassy in Kazakhstan would comment Monday.

The OKIOC official said further changes in the group's ownership were likely.

"There may be a decision on the operatorship but I don't think it'll be the last we hear on shareholding changes in the next few months," he said.

Russia, Iran and Turkey are all vying to transport the oil from the landlocked republic.