Kazakhstan makes decision to purchase shares of ConocoPhillips in North-Caspian project for summer of this year

Feb. 1. Trend. Astana

By D. Mukhtarov

Kazakhstan makes decision to purchase shares of ConocoPhillips in North-Caspian project for summer of this yearKazakhstan will make the final decision about their priority right to purchase the shares of ConocoPhillips in the North-Caspian project for the summer of this year, government source that was informed about the negotiations told Trend.

“It is too early to claim that Kazakhstan abandoned its pre-emptive right to buy share of ConocoPhillips in the North – Caspian project (Kashagan). Country authorities despite the fact that the shareholders of the consortium put expires in such cases, two months for a decision, may consider this issue for some months. Final decision will be adopted before the summer of this year, “- said the source, commenting that appears in several media publications that Kazakhstan, supposedly already waived its pre-emptive right to acquire a share in the first draft of subsoil under current legislation.

As previously reported, at the end of December last year, the managing director of the National Welfare Fund of Kazakhstan Samruk-Kazyna for issues of development of “KazMunaiGas” Malik Salimgereev said that if they decide to buy a stake in the Kashagan project of ConocoPhillips, Kazakhstan’s national oil and gas company “KazMunaiGas” does not exclude possibility of borrowing in foreign markets for the purpose.

According to him, an official statement from ConocoPhilips the sale of its 8.4 – percent interest in the project was published in late November. According to the procedure, the shareholders of the consortium have two months to discuss the feasibility of its priority right to purchase that share.

“KazMunaiGas, which is part of the consortium and other shareholders are currently considering the matter” – Malik Salimgereev said.

According to him, it is also possible, when the share of ConocoPhilips may be distributed to shareholders in equal parts.

“In the case of a positive decision, if necessary, we (KMG-ca.’s) can take the borrowing in foreign markets to buy this stake,” – Salimgereev said.

In addition, last week, three days before the expiration of two months for the shareholders of the consortium to decide on the share of ConocoPhillips, the minister of oil and gas Mynbayev answering the relevant questions, said that negotiations between the shareholders of the consortium NCOC (North Caspian Operating Company) not done yet, and there is not the final decision who gets the right to buy shares of abandoned yet.

Recall that ConocoPhillips announced its intention to sell its stake in Kashagan field development project – unit of Indian state oil company ONGC, responsible for international projects – ONGC Videsh Limited.

However, as is well known, under Kazakh law, Kazakhstan and other shareholders have the priority right to acquire a share of ConocoPhillips in the project.

Kashagan is one of the largest fields discovered in the past 40 years. According to analysts, Kashagan has the potential to unite the top five largest oil companies in the world. Kazakh geologists estimate geological oil reserves of 4.8 billion tons. According to the project operator, total oil reserves are 38 billion barrels (six billion tons), with a recoverable volume of about 10 billion barrels. Natural gas reserves are estimated at over one trillion cubic meters.

At present, the Kashagan project’s participants are Eni, Royal Dutch Shell, Exxon Mobil, Total and KazMunaiGas, which own equal numbers of shares (16.81 per cent), as well as ConocoPhillips – 8.4 per cent and Japan’s Inpex – 7.56 per cent.