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. Last Updated: 07/27/2016

Eni Expects to Resume Talks On Kashagan By This Month

CORTINA D'AMPEZZO, Italy -- A multinational oil consortium led by Italy's Eni will soon start talks with the Kazakh government on the future development of the giant Kashagan oil field, Eni CEO Paolo Scaroni said Saturday.

Kazakhstan has said it wants a bigger share of revenues from the world's biggest oil-field discovery in 30 years in compensation for delays in pumping the first oil from the Caspian Sea wells and threatened to strip Eni of its role as project operator.

"We are getting ready for challenging, but serene talks," Scaroni told reporters on the sidelines of a conference in the Italian holiday resort of Cortina d'Ampezzo. "Our relations with the Kazakh authorities are and have always been excellent and we do not have particular worries."

Scaroni said the talks with the Kazakh government were delayed by parliamentary elections in the country and that he would go there before the end of August. He reiterated that Eni was ready to resolve all problems.

Kashagan's start-up has been delayed from an original target of 2005 to the second half of 2010. The Kazakh government says projected costs over its 40-year life have increased to $136 billion from $57 billion.

Eni has not commented on the lifetime costs but has said that just the first phase costs have doubled to $19 billion.

"The Kazakh government intends to renegotiate the contract and this does not surprise us. We think it's normal because the contract was born when oil prices were much lower," Scaroni said.

He said the consortium -- which also includes ExxonMobil, France's Total, Shell, ConocoPhillips and Japan's Inpex -- has kept the Kazakh oil company KazMunaiGaz informed about the project delays and increasing costs.

The former Soviet state has also demanded a greater role for KazMunaiGaz in projects and is passing legislation restricting how subsoil assets can be bought and sold.