By GUY CHAZAN
January 14, 2008; Page A3
LONDON — A long-running dispute over one of the world’s biggest oil-development projects was finally resolved last night with an agreement to let the Kazakhstan state oil and gas company double its stake in the multibillion-dollar venture.
But the amount JSC NC KazMunaiGaz will pay for its increased share shows how little leverage Western companies have these days when faced with oil-rich countries emboldened by soaring crude prices and determined to regain control of their natural resources.
The agreement brings to an end a quarrel that threatened the future of Kashagan, a vast oil field in the Caspian Sea that has some 13 billion barrels of recoverable reserves, and which was the biggest oil find in 30 years when it was discovered nearly eight years ago. “With this successful end to the long and difficult negotiations which began last August, the way forward for the Kashagan project has been found,” KMG said.
Under the agreement, KMG’s stake in the consortium will rise to 16.6%, at the expense of all the other partners. The other big shareholders — Eni SpA of Italy, Exxon Mobil Corp, Total SA of France and Royal Dutch Shell PLC — will also each hold 16.6%, down from 18.5%. The remaining two shareholders, ConocoPhillips and Inpex Holdings Inc. of Japan, will also see their stakes diminish.
According to a person close to the talks, the Kazakhs will pay $1.78 billion for the additional 8% — a figure analysts said doesn’t fully reflect Kashagan’s significance. The project is expected to cost $136 billion over its 40-year life and will ultimately pump 1.5 million barrels of oil per day.
Some analysts said the partners couldn’t have expected more for the stake. “The below-market value of this transaction makes up for what the Kazakhs perceive as the bargain price the majors originally paid for this concession,” said Alex Turkeltaub, managing director of Frontier Strategy Group, a Boston-based consultancy focused on emerging markets. “This deal allows the Western partners to maintain operational control of the project while satisfying the Kazakhs as well.”
The Eni-led consortium agreed to make an additional payment to Kazakhstan of between $2.5 billion and $4.5 billion, depending on the oil price, according to the person close to the talks. The payment included a one-off bonus of $300 million, with the rest comprising a royalty, he said. Kazakh officials couldn’t be reached for comment late yesterday.
Write to Guy Chazan at [email protected]
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
MORE DETAILS:
A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
