Kazakhstan: An Oil Field Deal

Kazakhstan reached an agreement late Jan. 13 with the consortium of oil supermajors responsible for developing its mammoth Kashagan oil field. The consortium will pay between $2.5 billion and $4.5 billion to make up for the project's slow start, while Kazakh state oil company KazMunaigas will double its stake in the project to 16.8 percent. In return, Kazakhstan is expected to remove most of the legal hurdles it has introduced to obstruct the consortium's progress and give itself the upper hand in negotiations. Whether this is a sincere attempt by Kazakhstan's government to return to the liberal attitude of previous days or a feigned concession and prelude to further manipulation of foreign investors remains to be seen.