Kazakhstan threatens to revoke Kashagan permit

ASTANA, Aug 21 (Reuters) Kazakhstan threatened today to revoke an Eni-led consortium's permit to exploit the giant offshore Kashagan oilfield due to environmental law violations.

The threat came a day after Italy's Eni and the government started negotiations over the future of the project. The Caspian Sea site is one of the biggest oil finds in decades but has been beset by delays that have angered the government.

Ecology Minister Nurlan Iskakov told a government meeting his ministry had evidence that the AgipKCO consortium, which also includes Shell, Exxon Mobil and ConocoPhillips, was in breach of environmental laws.

''Work at Kashagan may be stopped altogether,'' Iskakov said.

''If the obligations Agip has taken upon themselves are not complied with, we are by law obliged to recall their permit because further operations will cause more ecological damage.'' He did not specify the nature of the previously unreported environmental damage or what measures AgipKCO should take.

The Ecology Ministry was due to hold a news conference shortly after the government meeting ended.

Kazakh Prime Minister Karim Masimov told the same meeting: ''I order Energy Minister (Baktykozha) Izmukhambetov to settle the issue and take measures today in accordance with Kazakhstan's legislation, and report to me on that.'' France's Total, Japan's Inpex and Kazakh state oil company KazMunaiGas are also members of the Kashagan consortium.

Reuters LPB GC1801