Brussels, 07/09/2007 (Agence Europe) - On Thursday, the Kazakh authorities demanded that the national public energy group KazMunaïGas have a leading role in the Kashagan oil project in the Caspian Sea. “According to the orders and demands of the Kazakh president (Ed: Nursultan Nazarbayev), KazMunaïGas should be a joint operator of this project,” Kasakh Prime Minister Kariml Massimov told press on the sidelines of a conference in Astana. “I will not say anything about percentages at this stage,” he said, however, before adding: “We think the economic balance has been broken to the disadvantage of the Kazakh government”. Under the initial terms of the contract signed between Kazakhstan and six foreign oil companies, KazMunaïGas would hold an 8.33% share of the project within a consortium led by ENI of Italy, and comprising Royal Dutch Shell of the Netherlands, Total of France, and the US Exxon Mobil, each holding 18.52% shares, and the US ConocoPhillips (9.26%) and Inpex of Japan (8.33%). The Kashagan oil field, with its 38 billion barrels, 18 billion of which are accessible, holds the largest oil reserves discovered in 40 years, but it represents a major technical challenge, with the oil sitting over 5,000 metres below the Caspian Sea, where the temperature can reach -40º in winter. On 27 August, Kazakhstan ordered a three-month suspension of all activities in the Kashagan field, following a dispute over the timetable for bringing the field on line and on the spending which has vastly overshot initial predictions. According to the Kazakh government, the cost of the project, set out over 40 years now stands at 136 billion dollars compared with 57 billion initially. Originally planned for 2005, the start of production has been postponed until the second half of 2010. Over and above, the Kazakh authorities accuse the ENI-led consortium of failing to meet its environmental obligations. While confirming Astana's wish to keep a grip on the project, which it hopes will see Kazakhstan become one of the world's ten largest producers of crude and double its production in the next decade, Mr Massimov, nonetheless, denied seeking to exclude foreign investors from the Kazakh oil sector. He also called on ENI and European Energy Commissioner Andris Piebalgs to join talks to find a negotiated solution. “Kazakhstan is immune from so-called resource nationalism,” Mr Massimov said, stating, however, that Astana had a “plan B” to overcome the refusal of the foreign oil companies to satisfy their demands. Mr Piebalg's spokesman, Ferran Tarradellas told EUROPE on Friday that the commissioner did not rule out going to Astana. “But for the moment, the Commission is following events without interfering in negotiations between the European companies and the Kazakh authorities,” he said. (eh)