Kazakhstan halted work on Monday at a vast oil field operated by the Italian group ENI, in the latest squeeze on foreigners who bought into the region's massive resource wealth in the 1990s.
"We have stopped activity at the location for three months ... Our questions about environmental protection are not being answered," Ecology Minister Nurlan Iskakov said at a news conference.
ENI has faced increasing official complaints over the Kashagan field, which contains seven to nine billion barrels of extractable crude, as the Kazakh government has sought a fourfold increase in the future profits from it.
The rising pressure on ENI echoes a campaign in neighbouring Russia last year against British-Dutch Shell, which raised concerns about openness in the energy-rich region to foreign investment.
Kazakh Energy Minister Baktykozha Izmukhambetov said in late July that the government wanted 40 percent of the profit from the field's oil production, rather than the 10 percent agreed to under a 1997 contract.
The Kashagan contract was concluded as a production-sharing agreement (PSA), a deal common in post-Soviet countries during the 1990s that gave foreign investors large stakes in what were then considered risky projects. Energy-rich countries around the world, from Russia to Venezuela, have sought to regain state control over such projects in recent years.
Kazakh officials warned ENI last month they could re-examine its contract after the Italian energy giant delayed the start of production at Kashagan from 2008 to 2010 and raised its cost projection from 57 billion dollars to 136 billion dollars (100 billion euros).
Analysts said they believed the work stoppage at Kashagan was aimed at strengthening Astana's hand in talks over the 140-billion-dollar project. ENI said talks were underway on Monday, while ENI chief executive Paolo Scaroni has said he will visit Kazakhstan after September 4 to meet members of the newly elected Kazakh parliament.
In a campaign with close parallels to the Kashagan affair, Russia wrested control over the vast Sakhalin-2 oil and gas field from British-Dutch Shell last year, rattling foreign investors in the energy sector.
Russia was similarly riled by cost overruns and production delays at Sakhalin-2, and threatened to withdraw the license for the field due to alleged environmental violations.
Shell ceded control of the 22-billion-dollar project to state gas giant Gazprom in December. Kashagan, located in the north-east of the Caspian Sea, has been billed as one of the largest oil discoveries of the past 30 years. Partnering with Eni in the project are French energy company Total, Royal Dutch Shell, ExxonMobil, ConocoPhillips, Japan's Inpex and Kazakhstan's state-owned KazMunaiGaz.