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. Last Updated: 07/27/2016

Eni Says Kashagan Talks Will Continue

Italian oil group Eni said Tuesday that the group of oil companies it leads in developing the giant Kashagan field would continue talks with Kazakh authorities on the project, whose delays and cost overruns have irked Astana.

Eni CEO Paolo Scaroni met the Kazakh prime minister, energy minister and other top Kazakh officials Tuesday.

"During the talks, which were held in a climate of cooperation and focused on the Kashagan project, the basis was set for negotiations between the KCO consortium, of which Eni is operator, and the Kazakh authorities," Eni said in a statement.

Scaroni arrived in Kazakhstan to be greeted by a fresh warning from the energy and natural resources minister, Sauat Mynbayev.

"During their meeting, the energy minister said it was unacceptable to harm the economic interests of the Republic of Kazakhstan and expressed concern over systematic violations by certain foreign resources companies of the national laws and ... project delays," the Kazakh Energy Ministry said in a statement.

"Delays at developing the Kashagan oil field ... will lead to a substantial fall in planned economic growth over the next decade and threaten the implementation of long-term economic development programs in the country."

Mynbayev said Kazakhstan would "never approve'' an increase in the budget for the Kashagan development to $136 billion, as requested by operator Eni.

Mynbayev said, however, that Kazakhstan was ready to continue talks.

"Kazakhstan is ready for an open dialogue aimed at solving the question of Kashagan's development, and I ask you not to politicize our justified demands," the statement quoted the minister as telling Scaroni.

Kazakhstan has accused the consortium of a host of violations, from environmental issues to fire safety rules, in a case that has triggered talk among analysts about so-called resource nationalism and harmed investor confidence.

Last week, Kazakh Prime Minister Karim Masimov demanded a leading role for state energy firm KazMunaiGaz in running the field after Astana criticized Eni as operator.

Reuters, Bloomberg