* Latest Kazakh deal could be signed next week - source
* New funds will raise prepayment to $2.25 bln
* Prepayments help traders secure supplies, lift margins
By Julia Payne, Olzhas Auyezov and Gleb Gorodyankin
LONDON/ALMATY/MOSCOW, July 4 (Reuters) - Major European trader Vitol is set to increase its cash-for-oil deal with Kazakhstan’s state energy firm by offering about $650 million or more to finance the Kashagan oilfield, sources familiar with the matter said.
One industry source said the deal was worth $650 million and could be signed as early as next week. Three other banking and industry sources said the deal could be worth up to $750 million and would be signed soon, without giving a specific date.
The additional funds will bring Vitol’s prepayment for Kashagan to about $2.25 billion.
A spokeswoman for Vitol declined to comment. Kazakhstan’s state oil firm KazMunayGaz (KMG) did not respond to a request for comment.
Vitol initially won a tender in 2016 to provide $1 billion to cover KMG’s share in the Kashagan field in exchange for crude cargoes. The loan, syndicated between various international banks, was increased by $600 million in September.
Kazakhstan holds a 16.88 percent in the field via KMG Kashagan (KMG), a subsidiary of KMG.
Kashagan, one of the biggest oil fields to be developed in recent decades, came onstream 11 years behind schedule and was dubbed the most expensive oilfield.
It now produces about 300,000 barrels per day (bpd). Kazakhstan produced 1.85 million bpd in May.
Kashagan is operated by the North Caspian Operating Company, made up of Italy’s Eni, Total, Shell , ExxonMobil, China’s CNPC, Japan’s Inpex and KMG.
Privately-held Vitol has been the dominant player in Kazakh oil exports for more than a decade, taking barrels mainly to Russian ports and shipping them to European refineries.
The trader first signed a prepayment deal with KMG in 2015 for oil from Tengiz, Kazakhstan’s largest producing field. Vitol offered $3 billion in that deal.
Oil prepayments have become a key method for traders like Vitol to combat razor-thin margins and to secure long-term supplies. (Additional reporting by Alla Afanasyeva in Moscow Editing by Edmund Blair)