In tips would be greatly appreciated.

I don’t think that KMG really wants, in the short to mid term, to take over the operator role in either Kashagan or Tengiz (where Chevron got into “environmental” trouble recently, too). These two are simply too challenging frontier operations, and who knows what other problems Eni (or another to-be-appointed operator) might face. KMG simply is not experienced enough.

That’s why the parallels to Sakhalin should not be overestimated, I think you’re right. At Sakhalin, it only started with three operators (with Shell owning a majority), making it much easier to apply pressure and, above all, negotiate behind-the-door deals (which played a big role in “convincing” Shell into selling half of its shares).

Also, correct me if I’m wrong - but Sakhalin Energy, the operator, is staffed by loads of Shell people and above all, the project is much older and is already, at least in part, onstream.

I think it really boils down to Eni and the Kazakh government being over-optimistic in the beginning. But now the Kazakh government tries to play this to its own advantage.

Masimov’s words that the Kazakh state looses much money with which it had planned to build hospitals and schools are tear-wrenching, but in the end nothing more than part of a clever bargaining strategy.

The pipeline issue, pointed out by the WSJ article you reference, would have prohibited Kashagan to go onstream properly as early as 2005, let alone now.

With Tengiz increasing its daily output but the Tengiz-Novorossiysk pipeline not being approved for extension plus a Caspian seabed pipeline showing no signs of leaving the planning stages, the Kazakh government can use the delay for a reshuffling of the contract details. A Chinese pipeline is also only slowly materialising from the planning stages.

By the end of this year, we might see the exit of one consortium member (and it doesn’t have to be Eni, others as well might just loose their interest and risk-appetite for that project). KMG would most likely take that one over (if there’s cash…). Furthermore, Kazakhstan might receive more than the negotiated 10% of the profits. We shall see.

I would also like to hear more about the recent cadre changes. Could they maybe hint at Masimov or Nazarbayev not being content with their own people’s handling of the whole Kashagan charade?

People I have spoken to essentially support the central gist of this article, which is that Eni may actually be primary source of the problem. That said, if the WSJ account is reliable, it sounds as though the Kazakh government has been woefully optimistic in its expectation of a quick return on this field.
There have been some parallels drawn, on an other point, between the Russian precedent at Kovykta and Sakhalin and Kazakhstan’s current stance, which Ben is to be commended for in pointing out as early as he did. However, although the strategies are notably alike, it is worth observing quite how the Kazakh government’s behaviour differs from its northern neighbour, which is increasingly viewing itself as a geopolitical counterweight as well as economic actor to be contended with.
I should be interested to know how people think whether there is broader international issue at stake in the revision of these formlerly open-ended resource development permits.
Also, have any Kazakh observers been able to shed light on the cadre changes taking place within the state holding that incorporates KMG and in the energy ministry itself?