Kazakhstan will freeze further development of its most promising gas field, Karachaganak, if it fails to resolve its dispute with foreign shareholders of the project, the Kazakh oil and gas minister said.
Kazakhstan, a vast Central Asian nation holding 3 percent of the world's recoverable oil reserves, has grown more assertive over its abundant natural resources in recent years, pushing to revise agreements signed with foreign energy majors when its budget coffers were empty following the Soviet collapse in 1991.
The government has expressed interest in exerting greater control over costs during the crucial Phase Three of Karachaganak's development.
"Without reaching agreement, Phase Three of the project will not be set in motion. Full stop," Kazakh oil and gas minister Sauat Mynbayev told reporters. "If we fail to reach agreement, the project will be frozen."
Mynbayev said last month that the government hoped to settle the dispute with the consortium within the first half of this year.
Kazakh state oil and gas company KazMunaiGas last year announced its ambition to acquire a stake in the Karachaganak Petroleum Operating Group (KPO), in which Britain's BG Group and Italy's ENI each own 32.5 percent.
U.S. energy major Chevron Corp has a 20-percent stake in the KPO and Russia's LUKOIL owns 15 percent.
ENI Chief Executive Paolo Scaroni said last August the company was holding talks on cutting its shareholding.
KPO, which is due to operate the project until 2038, has said hydrocarbon output at Karachaganak fell to 133.7 million barrels of oil equivalent in 2010 from 139.4 million barrels in 2009.
