KAZAKH MINISTER MEETS WITH EU ENERGY COMMISSIONER OVER OIL FIELD DISPUTE20 SeptemberKazakh Minister of Energy and Mineral Resources Sauat Mynbaev met on September 20 in Brussels with visiting European Union Energy Commissioner Andris Piebalgs to discuss the dispute between the Kazakh authorities and an Italian-led consortium over operations at the offshore Kashagan oil field in the Caspian Sea. Piebalgs called on the Kazakh government to continue negotiations with the consortium, adding that "successful cooperation in the energy sector" requires "mutual respect, transparency, and predictability." The meeting follows Mynbaev's recent call for "an open dialogue" to resolve the dispute, which culminated in Kazakhstan's suspension of operations at the Kashagan oil field for three months due to alleged violations of environmental-protection laws and consistent delays and cost overruns by Eni, the consortium in charge of operations. Relations between Kazakhstan and the consortium have also been strained by Eni's decision to push back the start of production at the oil field from 2008 to late 2010. The total projected cost for operating the Kashagan field has more than doubled from initial estimates of $57 billion to $136 billion. The Kashagan field holds between 7 billion and 9 billion tons of proven reserves, making it the single-largest oil field discovered in the last three decades and the fourth- or fifth-largest in the world. (Interfax-Kazakhstan)

AZERBAIJAN REJECTS CRITICISM OF MILITARY SPENDING21 SeptemberAzerbaijani Deputy Foreign Minister Araz Azimov rejected on September 21 as "unfounded and far from the truth" the statement the previous day in Bishkek by Nikolai Bordyuzha, secretary-general of the CIS Collective Security Treaty Organization (ODKB), that the increase in defense spending by Azerbaijan and Georgia constitutes a threat to ODKB member states. Azimov pointed out that of the three South Caucasus states, only Armenia is an ODKB member, and therefore that organization has no right to extend its interests to the region. Ziyafet Askerov, who chairs the Azerbaijan parliament's defense and security commission, told day.az that Russian and Armenian media have grossly overstated Azerbaijan's military spending. He argued that Azerbaijan has not exceeded the ceiling of 6 percent of GDP, but that it has the right to do so given that "we were the victims of aggression." (day.az)

KYRGYZ PRESIDENT VOWS TO NOT EXTEND HIS TERM IN OFFICE22 SeptemberSpeaking to reporters in Bishkek, Kyrgyz President Bakiev promised on September 22 that he does not intend to extend his term in office if the country's new constitution is adopted in the October 21 referendum. Bakiev made the pledge after meeting with representatives of the For the Constitution,Reforms, and Development public movement, a group that the presidential press service defined as set up in support of the president's decision to amend the constitution through a nationwide referendum. Bakiev also said that the amendments in question in the referendum would "envisage the formation of a parliament on the basis of party lists." That change was already part of the 2006 amendments that eliminated single-mandate districts, although other amendments adopted in late 2006, which imposed new limits on presidential authority following widespread demonstrations, were later significantly modified and watered down by pro-government parliamentarians in December 2006, restoring much of the power to the presidency. Bakiev recently announced that he intends to form a new political party, presumably to take advantage of the new party-list-based parliamentary election, which will probably be called for early 2008, after the planned constitutional referendum. (24.kg)

Georgia attacks Abkhaz border outpost - Abkhaz official22 SeptemberAn intensive fire exchange erupted at the border between Georgia and Abkhazia early on Saturday. "A fierce fire exchange between Abkhaz border guards and Georgian servicemen occurred near the village of Dikhazurga at about midnight," Abkhaz presidential envoy to the Gali district Ruslan Kishmaria told Interfax on Saturday. "The positions of Abkhaz border guards were fired upon from an outpost of Georgian troops beefed up by special forces, and the Abkhaz border guards returned fire," Kishmaria said. "All this grew into an intensive fire exchange," he said. Preliminary reports indicate that there were no casualties on the Abkhaz side, he said. "Georgia had brought additional military units into the security zone right near the border with Abkhazia, although they are not supposed to be there," Kishmaria said. (Interfax)

Bagapsh accuses Tbilisi of state terrorism, hostage taking23 SeptemberPresident of the self-proclaimed republic of Abkhazia Sergei Bagapsh said that Georgia is a terrorist state and accused Tbilisi of hostages taking. "Now no one should doubt that Georgia is a terrorist state which takes hostages," Bagapsh told Interfax on Sunday. "Speaking about hostages, I mean seven Abkhaz bored guards and two South Ossetian peacekeepers, as well as many other people who still stay in Georgian prisons," the Abkhaz president said. "It was established that the attack on conscripts in the Kvarcheli district took place on the territory controlled by Abkhaz authorities," the president said. Bagapsh vowed to publish "evidence of inhuman treatment to prisoners of war on bhalf of Georgian authorities." "An Abkhaz border guards died after having been cruelly beaten up; his throat was cut. The second one, who also came under beating, was shot dead at a short range," Bagapsh said. (Interfax)

LITTLE-KNOWN FIGURE ANNOUNCES CANDIDACY FOR UZBEK PRESIDENCY24 SeptemberA little-known 64-year old Uzbek man, Akbar Aliev, announced on September 21 that he intends to run in the country's presidential elections, RFE/RL's Uzbek Service reported. A native of the southern Qashqadaryo Province, Aliev is a self-described "scientist, poet, sociologist, philosopher, historian, and specialist in literature," who has no involvement in politics and has never been associated with any political group or party. Mirzoulugbek Abdusalomov, the head of the Uzbek Central Election Commission, recently set December 23 as the date for the country's next presidential election. The election is seen as a watershed for Uzbekistan, since President Islam Karimov, who has ruled the country since 1989, is constitutionally prevented from running for another term as president. In an open letter published on several websites, Aliev said that the incumbent president should not stay in office for another term, and warned that any attempt to keep Karimov in the post would be a "betrayal of the country, its constitution, social justice, development, democracy, human rights, and statehood." Under the terms of Uzbekistan's electoral laws, Aliev needs to collect signatures in support of his candidacy from at least 300 registered members of either a political party or an initiative group, as well as from a minimum of 5 percent of the country's eligible voters, or about 800,000 people. (RFE/RL)

FORMER CHECHEN OFFICIAL CHARGED IN POLITKOVSKAYA KILLING24 SeptemberThe prosecution has formally charged Shamil Burayev, the former pro-Moscow head of Chechnya's Achkhoi-Martan Raion, with being an accessory to the murder in October 2006 of Russian journalist Anna Politkovskaya. Burayev is charged with having sought to obtain from former FSB Lieutenant Colonel Pavel Ryaguzov the address of the apartment Politkovskaya rented in Moscow and to have passed that address to several other suspects, including three Moscow-based Chechen brothers, Tamerlan, Djabrail, andIbragim Makhmudov. Burayev claims he is innocent, and several prominent Moscow-based Chechens and a former head of the pro-Moscow Chechen administration have expressed serious doubts that he was involved in Politkovskaya's killing. (RFE/RL)

KAZAKH MAYOR ORDERS MUNICIPAL OFFICIALS TO USE PUBLIC TRANSPORT24 SeptemberAskar Mamim, the mayor of the Kazakh capital, Astana, on September 24 issued an order compelling all senior municipal government officials to use public transport. Mamim explained that the directive applies to "the heads of all municipal departments, mayors of two districts in Astana, [and] all my deputies," and requires them to "use public transport [at least] once every three days." He added that the measure also orders the head of the Astana municipal interior department, General Serimzhan Dosumov, "change his military uniform to civilian dress and travel by public transport." (Interfax-Kazakhstan)

UN DEPLORES ABKHAZ KILLINGS25 SeptemberThe UN Observer Mission in Georgia (UNOMIG) released on September 24 a three-sentence statement(http://unomig.org/data/file/935/PR_2007_88_eng.pdf) expressing the UN secretary-general's concern over the death of two Abkhaz servicemen in a standoff four days earlier with Georgian Interior Ministry troops. The statement repeats previous calls by Secretary-General Ban Ki-moon to both sides to "exercise maximum restraint and prevent any further escalation." It also says UNOMIG is still engaged in evaluating the circumstances of the incident. Major General Sergei Chaban, who commands the Russian peacekeepers deployed under the CIS aegis in the Abkhaz conflict zone, was quoted by Russian media on September 23 as saying a joint inspection of the site on September 22 by CIS peacekeepers and UNOMIG personnel established that the incident took place not in the upper Kodori Gorge, as Georgian officials have consistently claimed, but in Abkhazia's Tkvarcheli Raion. Georgian Minister for Conflict Resolution Davit Bakradze said in Tbilisi on September 24 that Chaban was not empowered to issue any such statement. Meanwhile, Abkhaz President Sergei Bagapsh and Prime Minister Aleksandr Ankvab attended the funeral in Sukhum(i) on September 24 of the two men killed on September 20. Bagapsh said the Abkhaz leadership is engaged in talks with various international officials, including Council of Europe Human Rights Commissioner Thomas Hammarberg, on securing the release of seven Abkhaz taken prisoner by the Georgians after the death of their colleagues. The daily "Kommersant," however, claimed on September25 that the two men killed were Russian officers contracted to train recruits to the Abkhaz armed forces, and named them as Artur Dvorkin and Igor Muzovatkin. It said Muzovatkin's body will be taken to Maikop for burial there. The paper further quoted an army officer in Adygeya as denying that Muzovatkin could have headed a group of saboteurs, which is how Georgian Interior Minister Vano Merabishvili on September 21 characterized the men the Georgians attacked. That officer pointed out that Muzovatkin graduated from a mainstream military college, whereas the training of saboteurs is the exclusive preserve of military intelligence. (RFE/RL)

POLITICAL PARTIES IN KAZAKHSTAN CALL ON GOVERNMENT TO HALT RISE IN BREAD PRICE26 SeptemberThe opposition Ak Zhol, Auyl, and Rukhaniyat parties and the Communist People's Party of Kazakhstan released a statement at a press conference in Astana on September 26 calling on the government to intervene to prevent any further rise in bread prices, the website kz-today.kz reported. They argued that the price of one quality loaf should not exceed 30 tenges ($.024). On September 24, Interfax-Kazakhstan quoted Deputy Prime Minister Umirzak Shukeev as saying the price of a small bread roll in Almaty is now 60 tenges. Communist leader Vladislav Kosarev said his party has collected over 120,000 signatures to a formal protest, and he warned that "if the government does not take measures to reduce bread prices, we shall call for its resignation." (RFE/RL)

Georgia must stop provoking Russia - ambassador26 SeptemberRussian ambassador to Georgia Vyacheslav Kovalenko believes that Georgia must stop its provocative actions with regard to Russia. "The provocative actions with regard to Russia must be stopped. It is common knowledge that two Russian citizens arrested by Georgian special troops remain in custody. They are servicemen of the North Ossetian peacekeeping battalion," Kovalenko told the press in Tbilisi on Wednesday. Kovalenko said Russia insists on their immediate release. The Georgian special police detained Tariel Khachirov and Vitali Valiyev during an operation in the Tskhinvali district on August 29. The two peacekeepers from North Ossetia were held on charges of illegally restricting the freedom of nine Georgian citizens, including six members of TV crews representing the Rustavi-2 and Mze channels. The Mtskheta City Court ruled that the pair remain in custody for two months. (Interfax)

ARMENIAN PRESIDENT WARNS PREDECESSOR26 SeptemberRobert Kocharian took issue on September 25 with criticism of his policies expressed by his predecessor, Levon Ter-Petrossian, at an Independence Day gathering in Yerevan on September 21, RFE/RL's Armenian Service reported. Pointing to double-digit economic growth over the past five years and to a huge increase in government spending, Kocharian rejected as unfounded Ter-Petrossian's allegation that his administration has reduced Armenia to the status of a third-world country. Kocharian further said that he has refrained until now out of respect from publicly attacking Ter-Petrossian, but that if Ter-Petrossian decides to run in the presidential election due early next year, the present leadership will play up the material and economic hardships Armenians suffered during Ter-Petrossian's presidency. Also on September 25, former Prime Minister and opposition National Democratic Union Chairman Vazgen Manukian, Ter-Petrossian's main challenger in the controversial 1996 presidential ballot, expressed disappointment that Ter-Petrossian did not acknowledge his responsibility for the economic and social problems that Kocharian inherited, RFE/RL's Armenian Service reported. (RFE/RL)

S. Ossetia says its capital has come under Georgian fire26 SeptemberThe leader of the Georgian breakaway South Ossetia region, Eduard Kokoity, on Wednesday ordered heavy weapons to be moved into the South Ossetian capital of Tskhinvali after an alleged 40-minute barrage of gunfire was waged against the city from nearby Georgian villages, a senior South Ossetian official said. "Literally 10 minutes ago, the supreme commander in chief ordered heavy armaments to be moved into the area of confrontation of our armed forces and Georgian forces on the outskirts of Tskhinvali with a directive to suppress fire against the city that would come from the Georgian side," Irina Gagloyeva, head of the South Ossetian Information and Press Committee, told Interfax by telephone from Tskhinvali. Gagloyeva said the edge of Tskhinvali came under fire on Wednesday night. "The fire went on for 40 minutes. It is being found out currently whether there have been any fatalities and destruction," she said. (Interfax)

S. Ossetia opens "embassy" in Abkhazia26 OctoberRobert Kokoity, whom the Georgian secessionist South Ossetia region has appointed "ambassador" to Georgia's other breakaway region, Abkhazia, handed his credentials to Abkhaz Foreign Minister Sergei Shamba on Wednesday. Shamba called the opening of the South Ossetian "embassy" in Abkhazia an "historic" fact. "This event is a logical conclusion to long-time and fruitful cooperation between the two republics," he said. "In an environment marked by constant political and military provocations on the part of Georgia, the peoples of the two countries reaffirm their loyalty to the peaceful settlement of the conflicts by building up and strengthening their bilateral relations," Shamba said. (Interfax)

KAZAKH PARLIAMENT ADOPTS NEW RESTRICTIONS ON FOREIGN INVESTORS27 SeptemberThe Kazakh parliament adopted on September 26 a bill imposing new restrictions on foreign investors, while making it easier for the state to modify or nullify contracts with foreign companies. The legislation weakens the rights of foreign investors by allowing the Kazakh government to force retrospective changes to contracts or to completely cancel the terms of the contracts with foreign companies if the agreement is found to be "a threat to the country's national economic interests." The bill requires the additional approval of the upper house of the Kazakh parliament and needs to be signed by President Nursultan Nazarbaev prior to becoming law, however. Kazakh Senator Gani Kasymov recently threatened to suspend the Caspian Sea offshore operations of an international consortium led by the U.S. energy company Chevron unless the company addresses environmental concerns and the Kazakh government decided last month to halt work at the Kashagan oil field for three months due to alleged violations of environmental-protection laws, as well as consistent delays and cost overruns by Eni, the Italian leader of the consortium in charge of operations. (Reuters)

Azerbaijani State Oil Company Increases Estimate for Major Gas Field27 SeptemberAzerbaijan's state oil company announced Thursday that natural gas reserves in a major offshore field in the Caspian Sea are believed to be nearly twice as large as previously estimated. Recent drilling at the Shah Deniz field showed that total gas reserves could be as much as 1.2 trillion cubic meters of natural gas and 240 million tons of gas condensate, the State Oil Company of Azerbaijan said in a statement. That is nearly double the recent reserve estimate by BP PLC, the company leading the development of the field -- about 640 billion cubic meters. The statement from the company, known as SOCAR, quoted First Vice President Khoshbakht Yusifzade as saying that the new estimates were based on the results of drilling at a $240 million, 7,300-meter exploration well on the field's southwest flank. The BP-led consortium developing Shah Deniz also includes Norway's Statoil ASA, France's Total SA and Russia's OAO Lukoil. Azerbaijan has some of the largest oil and gas reserves in the former Soviet Union. Also Thursday, SOCAR President Rovnaq Abdullayev announced the company planned to resume pumping oil via the Baku-Supsa pipeline next spring, after engineers replace a large section of piping and make some $22.5 million in repairs. The 500-mile pipeline, running from the Azerbaijani capital to the Georgian Black Sea port, has been shut down since last November after problems were found in some sections. The pipeline has a 140,000-barrel-a-day capacity. Shipments arriving in Supsa are loaded onto oil tankers that must then traverse Turkey's Bosporus, which are dangerously crowded. Several western- and Russian-led projects are seeking to build pipelines to circumvent the straits. Abdullayev also announced that SOCAR planned to break ground on a $4 billion oil refinery near Turkey's Mediterranean port of Ceyhan beginning next year, in cooperation with Turkish company Turgas. (AP)

AZERBAIJAN PLANS FURTHER INCREASE IN DEFENSE SPENDING27 SeptemberOn September 26, the Azerbaijani cabinet unveiled the draft budget for 2008. The draft projects budget revenues of 7.38 billion manats ($8.674 billion), expenditure of 8.5 billion manats, and a 16 percent increase in gross domestic product to reach $32.7 billion. Defense spending is projected at 1.137 billion manats, a 25 percent increase over the figure for 2007. CIS Collective Security Treaty Organization Secretary General Nikolai Bordyuzha recently termed the constant rises in defense spending in both Azerbaijan and Georgia a threat to the entire region, an argument that Azerbaijani officials dismissed as unfounded. (RFE/RL)

Azerbaijan to start building $4-bln refinery in Turkey in 200828 SeptemberThe State Oil Company of Azerbaijan will start building a $4 billion oil refinery in Turkey in 2008, company president Rovnag Abdullayev said Thursday. The refinery, expected to have capacity of 15 million tons annually and to consist of an oil refining unit and a petrochemicals unit, will be built close to the Ceyhan port on the Mediterranean, to which oil is pumped via the Baku-Tbilisi-Ceyhan pipeline. Abdullayev also said the Turkish government had allocated 1,000 hectares of land for the refinery, and that a feasibility study is underway. The 1,700-kilometer (1,000-mile) Baku-Tbilisi-Ceyhan oil pipeline, expected to start operating at full export capacity (1 million bbl/d) in 2008, pumps crude from Azerbaijan's oil fields off the Caspian coast via Georgia to Turkey, and onto Western markets. (RIA Novosti)

Georgian Opposition Leader to be jailed during investigation29 SeptemberIrakli Okruashvili, a former defence minister and vocal critic of Georgia's president, will spend two months in jail during a probe into possible wrongdoings, RIA Novosti news agency reported Saturday citing a court ruling. Okruashvili was arrested on charges of corruption, money laundering, abuse of power and negligence on Thursday shortly after alleging that President Mikheil Saakashvili had ordered the killing of high-profile public figures. Officials have dimissed the allegations as "baseless and untrue." Thousands rallied in the capital Tbilisi on Friday to denounce the arrest. Saakashvili has touted his government's democratic record as he pushes for Georgia's membership of NATO and the European Union. Okruashvili whose supporters accuse the president of trying to silence a potential rival heads the Movement for United Georgia party. His arrest came against the backdrop of rising tensions between the former Soviet republic and Russia, as well as violence in two separatist regions. (AFP)

Financial Argument Leaves Nine Dead in Dagestan30 SeptemberNine people were killed on Sunday in an incident in the village of Gonoda in Dagestan's Gunib district, a spokesman for the local police told Interfax. An argument between creditors and debtors reportedly deteriorated into a shooting spree, he said. "Several people arrived from the Tsumada district last night to demand a debt from a local resident. Exactly what happened is not clear, but an argument and a shooting spree erupted two kilometers away from Gonoda. Nine people, including the local police officer, were killed. An operation to track down the "visitors" is under way. (Interfax)

Azeri Shakh-Deniz delays part 2 gas to 20131 OctoberStarting the second, $10 billion phase of Azerbaijan's biggest gas field, Shakh-Deniz, has been delayed by one year to 2013 as the project faces development problems, the project's owner said on Monday. Potential buyers of the gas from phase two are Georgia, Turkey and southern European countries, who are seeking an alternative gas supply to Russian gas export monopoly Gazprom. "Launching phase two in 2013 is more realistic. The postponement comes from complications in drilling and a delay in extracting gas," Jan Heiberg, Vice President of Statoil , which co-leads the project with BP , said. Gas was first retrieved from the development in the Caspian Sea in December 2006 during phase one until geophysical oversights and sudden well leaks halted extraction until February of this year. Currently Shakh-Deniz produces around 15 million cubic metres of gas per day and has reserves of 1.2 trillion cubic metres and sends all of it to Turkey via Georgia. It is so huge a third phase may be required, the company said. "Peak production of phase two is scheduled for 2015 with an excess of 20 billion cubic metres of gas per year," Heiberg said. "We want to accelerate negotiations with Turkey on a transit agreement. According to EU law, it's not illegal to re-direct Azeri gas," he added. Gas could be exported by the Nabucco pipeline, which will take gas from Turkey to central Europe, or across the Adriatic Sea. Next year Shakh-Deniz plans to export 7 bcm, up dramatically from this year's 2.8 bcm. Azerbaijan's state energy company Socar is a partner in Shakh-Deniz, along with Russia's LUKOIL , France's Total and Iranian and Turkish state firms. (Reuters)

BTC glitch fixed; regular flow resumes2 OctoberPumping of oil through the Baku-Tbilisi-Ceyhan pipeline has resumed following its suspension last week due to a technical glitch. The Turan news agency reported Monday that the pipeline should be at capacity Tuesday. Suspension did not affect Azerbaijani oil exports, the news agency reported. The Baku-Tbilisi-Ceyhan pipeline sends oil from an Azeri field in the Caspian Sea to Ceyhan, Turkey, via Georgia. Within a few years the BTC pipeline is expected to take 1.6 million barrels per day of oil to Europe. (UPI)

UN may open office in Grozny - Chechen speaker2 OctoberGrozny has confirmed its call to international humanitarian organizations to bring their offices and storage facilities to Chechnya and stated that there are no obstacles to opening a UN office in Chechnya. "There are absolutely no obstacles. Buildings and territories are safe. Let them come, settle and work," Chechen Parliamentary Speaker Dukvakha Abdurakhmanov said at a Tuesday news conference at the Interfax central office responding to a question about the possibility of opening a UN office in Grozny. The Chechen leadership still believes that the international humanitarian organizations operating in the republic should bring their offices and storage facilities to Chechen territory. (Interfax)

Taliban burn district center in central Afghanistan; 5 Dutch troops wounded in clash3 SeptemberTaliban militants killed two policemen and destroyed a remote district center in central Afghanistan, as five Dutch troops were wounded in a clash in the country's south, officials said Wednesday. Dozens of militants armed with heavy weapons attacked a government office in Ghazni province's Ajristan district late Tuesday, burning the building and killing two policemen, said Ghazni police chief Ali Shah Ahmadzai. The remaining officers fled into a nearby village, he said. Police reinforcements, backed by the U.S.-led coalition, were sent to the remote area on Wednesday, Ahmadzai said. Taliban routinely attack remote police and government offices, but are rarely able to control these buildings for long after police or army reinforcements arrive. In southern Afghanistan, meanwhile, five Dutch soldiers serving with NATO's International Security Assistance Force were wounded Tuesday night in Uruzgan province, after militants opened fire on them, the Dutch Defense Ministry said in a statement. The five wounded troops were transferred to a Dutch hospital in the force's main base near Tirin Kot, Camp Holland. Their injuries ranged from grazes and back injuries to broken bones, the ministry statement said. The latest incidents come as the United Nations reported a nearly 30 percent increase in violence this year in Afghanistan, with suicide bombings causing a high number of civilian casualties. The report said Afghanistan is averaging 550 violent incidents a month, up from an average of 425 last year. It said three-fourths of suicide bombings are targeting international and Afghan security forces, but suicide bombers also killed 143 civilians through August. An Associated Press count of insurgency-related deaths, meanwhile, reached 5,086 in the first nine months of this year. AP counted 4,019 deaths in 2006, based on violent incidents reported by Western and Afghan officials. That was the first year AP compiled such figures. The AP tally for this year includes more than 3,500 militants killed and more than 650 civilians dead from either insurgent violence or U.S. or NATO attacks. Nearly 180 international soldiers have been killed. That includes 85 U.S. military personnel, nearing the total of 98 American deaths reported by the Pentagon for all of 2006. (AP)

Kazakhstan softens rhetoric over Kashagan delay3 OctoberKazakhstan softened its rhetoric in a row with a group of foreign oil investors on Wednesday, saying ecological concerns should not prevent the Italian-led consortium from developing a huge offshore oilfield. The government had threatened to strip Italy's Eni of its leading role at Kashagan, the biggest oil find in three decades, as it negotiates a new budget and timetable for pumping crude. Addressing foreign investors at an annual energy conference, Energy Minister Sauat Mynbayev said the two sides should work out a compromise on environmental concerns, one of the government's main complaints alongside cost overruns and delays. Mynbayev said the government and Eni should sign a memorandum requiring the AgipKCO consortium to present a plan for dealing with sulphur extracted from the crude before commercial production starts. "Let's accept a compromise decision: after the date of commercial production is set, we will demand a plan on sulphur stocks by that date," he said. "If we sign this memorandum, nothing should prevent work at the project from continuing in its present form." Although inert, piles of yellow sulphur the size of several soccer fields have been frequently cited as an environmental concern by the government at the onshore Tengiz oilfield operated by Chevron . The government also seeks financial compensation of more than $10 billion for the delays in production at Kashagan -- a topic Mynbayev did not touch on. AgipKCO Managing Director Umberto Carrara declined to answer questions on the progress of Kashagan talks, but a presentation he gave focused on his company's environmental and social programmes."The Kazakh side has clearly softened the tone... and it's not just because of the presence of foreign investors today," a person familiar with the talks said. "The two sides are trying to work out a compromise decision." Despite the change in tone, Mynbayev repeated concerns about ballooning costs at the oilfield in the Caspian Sea and said the government had hired consultants to look into the issue. "How the cost managed to rise in a year-and-a-half from $57 billion to $136 billion raises certain questions," he said. "The interest of both sides have been severely violated. "We would like to discuss these issues in a calm atmosphere and we hope we will not have to resort to legislative measures. We hope to resolve all problems through talks." Talks are due to run until an Oct. 22 deadline. The government has said it would like to see its state company KazMunaiGas [KMG.UL], already a consortium member, become joint operator of the project. Most analysts believe Kazakhstan is unlikely to completely change the terms of the Kashagan deal as it needs foreign technical expertise. The Kashagan consortium also includes Royal Dutch Shell , Exxon Mobil Corp , Total , ConocoPhillips and Japan's Inpex. (Reuters)

Kazakhstan says to fine Chevron Venture3 SeptemberKazakh Ecology Minister Nurlan Iskakov said on Wednesday the government had imposed a $609 million fine on the Chevron-led Tengizchevroil oil venture over ecological and other violations.The fine comes at a time the Kazakh government is locked in a dispute with a separate group of Western oil majors led by Italy's Eni at another oilfield in the Central Asian state."As you know we also have big claims over Tengizchevroil," Iskakov told reporters. "We have put forward a fine of 74.4 billion tenge or $609 million." Iskakov said the fine was imposed due to various violations including what the government saw as the company's slow progress in dealing with vast sulphur stocks at the Tengiz onshore oilfield in western Kazakhstan. "Any company that does not fulfil ecological requirements will be dealt with in the harshest way," Iskakov said, adding that the matter was being handled by a regional court in the oil-rich part of Kazakhstan. Chevron Corp could not be reached for comment but it had previously rejected criticism of its environmental record in the former Soviet state and said it operated its sulphur stocks in a safe manner consistent with Kazakhstan's laws." TCO was previously fined $71 million for open air sulphur storage, but that was reduced on appeal in 2003 to $7 million by the Supreme Court. (Reuters)