A sweet deal for Kazakhstan crude oil
Italy's Eni has been working with Kazakhstan to develop the country's big crude oil discovery. But Kazakhstan has changed the rules of the original deal and doubled its original stake. Megan Williams reports.
Oil refinery (Getty Images)
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Doug Krizner: The film "Borat" may have put Kazakhstan on the map. Crude oil will likely keep it there. The country is boasting the world's biggest discovery in the last three decades. A group of oil giants led by Italy's Eni are developing it. But as Megan Williams reports, Kazakhstan has just changed the rules.
Megan Williams: It was a sweet deal for the Italian Eni and its partners: access to the world's biggest oil field in decades. Kazakhstan would share costs of production and take a slight 8 percent share.
That was a decade ago, when Kazakhstan was barely coping after communism. Crude oil was cheap and the country was happy to attract investors.
Then came costly delays and environmental concerns. Kazakhstan wanted a new deal. Now it's got one: double its original stake, a greater share in profit and compensation for delays.
Some analysts compare the move to Russia taking over the Royal Dutch Shell project in the Pacific Ocean last year. By asserting its rights, Kazakhstan is poised to earn $7 billion more.
I'm Megan Williams for Marketplace.
