OREANDA-NEWS. On January 14, 2007 KMG announced that agreement has now been reached with the entire Kashagan consortium in a new Memorandum of Understanding signed, reported the Official website http://en.government.kz.

The new Memorandum, which implements the Memorandum of Understanding signed on December 20, 2007, confirms the agreements tentatively reached in December regarding economic adjustments to the PSA and the operating model for future petroleum operations in Kashagan.

It also sets forth the agreement of all private Contracting Companies to transfer equity to KMG's subsidiary, bringing its participating interest in the PSA equal to that of the largest shareholders as of January 1, 2008. The parties will now proceed to draft and execute the appropriate amendments to the PSA. In the meantime, operations will proceed in accordance with the new arrangements. With this successful end to the long and difficult negotiations which began last August, the way forward for the Kashagan Project has been found.