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. Last Updated: 07/27/2016

Talks Stall as Exxon Blocks Kazakh Stake in Kashagan

Talks between Kazakhstan and oil companies developing the giant Kashagan field have stalled as U.S. Exxon Mobil is blocking the expansion of the state's share in the project, Interfax said Saturday.

The agency quoted unidentified sources as saying all other foreign members of the Kashagan group had agreed on a preliminary deal under which state energy firm KazMunaiGaz would raise its stake in the project from its current 8.33 percent.

The proposed compromise, under which all group members would proportionally reduce their stakes, could settle a dispute over cost overruns and delays at Kashagan, one of the world's largest oil field developments.

Interfax said KazMunaiGaz's stake could double if Exxon were to give the final nod. Kazakh officials and the oil companies could not be reached for comment on the report.

Exxon has 18.52 percent of Kashagan, alongside project leader Eni as well as Shell and Total, which have stakes of similar size.

Smaller stakes belong to ConocoPhilips, with 9.26 percent, and Japan's Inpex, with 8.33 percent.

Many partners, including Total, have called for a swift resolution, saying a deal should be reached by the end of the year. Eni has said the group is discussing the idea of increasing Kazakhstan's project role but has given few details.

Analysts have compared the development to similar moves by Russia, which last year ousted Shell from the leading role in the giant Sakhalin-2 liquefied natural gas project. Shell and its partners sold control to state-controlled Gazprom.

Kazakhstan has threatened to strip Eni of its leading role in Kashagan, the biggest oil find in three decades, as it negotiates a new budget, which may exceed $100 billion, and timetable for pumping crude.