KazMunaiGas Exploration Production has withdrawn from talks to develop the Akkas natural gas field in Iraq after failing to reach agreement with the government, the company said.

The Kazakh company, together with South Korean state-run Korea Gas Corp (Kogas), won a tender to develop the field in October 2010. Talks aimed at finalising an agreement with the Iraqi government have dragged on for several months.

"Unfortunately, the talks have failed to resolve all issues which emerged at a late stage and it has not been possible to develop a consensus document that would fully meet the interests of all parties," KMG EP said in a statement.   

KMG EP, the London-traded unit of state oil and gas company KazMunaiGas, declined to specify the unresolved issues. Its press service said in a written response to questions they were neither financial nor security-related.

"Victory in a tender does not automatically mean entry to the project. It's only the start of negotiations. As a result of such negotiations the sides either reach agreement and conclude a service contract, or they don't," the press service said.

KMG EP said it continued to view Iraq as "an attractive area for investment." It said that it had not incurred significant losses from the project as serious investment had not yet begun.

The Akkas natural gas field, located in Anbar province near Iraq's border with Syria, has estimated gas reserves of 5.6 trillion cubic feet. - Reuters