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Kazakhstan will not review its contract with Italy's energy giant Eni
Kazakhstan will not review its contract with Italy's energy giant Eni, the operator of the country's largest oil field on the Caspian shelf, if investors honor their commitments, the Kazakh leader said on Monday. "We will not speak about reviewing the contract signed a decade ago unless investors violate its terms," Nursultan Nazarbayev told a news conference after talks with Italian Prime Minister Romano Prodi. "Kazakhstan retains the right to take appropriate measures in line with the country's laws." Last week the Kazakh parliament adopted amendments to a law toughening requirements for companies involved in the extraction of mineral resources in the country. The law enables the government to demand that companies change and (or) amend contracts if their mineral development causes major changes in Kazakhstan's economic interests or pose a threat to its national security. The government suspended Eni's license to develop the Kashagan oil field for three months in late August. The Kazakh Ministry of Environmental Protection said the operations by Eni, involved in the development of Kashagan, could cause disastrous environmental damage and destroy local flora and fauna. In late July, the project operator suggested that the deadline to begin commercial production should be shifted from the second half of 2008 to the second half of 2010, with operating costs increasing from $57 billion to $136 billion. The Kazakh leader said the negotiators last met on Friday, and "should put an end to the issue." "These are normal relations between investors and the government, so I do not think there is an emergency situation there," Nazarbayev said. Kashagan's recoverable reserves were estimated in 2000 at 13 billion barrels of oil. Kazakhstan plans to increase its oil output to over 90 million metric tons (662 million bbl) by 2010 and to over 130 million metric tons (956 million bbl) by 2015 from the current 63 million tons (463 million bbl) as soon as oil production is launched at Kashagan, where, according to the latest estimates, recoverable reserves amount to at least 7-9 billion barrels of oil.
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