Kazakhstan tells ConocoPhillips it will buy its Kashagan stake

July 2. Reuters. ASTANA

By Raushan Nurshayeva

Kazakhstan tells ConocoPhillips it will buy its Kashagan stakeKazakhstan notified ConocoPhillips on Tuesday that it would use its pre-emptive right and buy the U.S. oil major’s 8.4 percent stake in the giant Kashagan oil project, the Kazakh Oil & Gas Ministry said in a statement.

National oil company KazMunaiGas will buy the stake on behalf of the Kazakh state, the ministry said.

It gave no price for the stake. “KazMunaiGas is getting down to completing all necessary procedures,” it said.

KazMunaiGas Chief Executive Lyazzat Kiinov told Reuters on Monday that Chinese state oil firm CNPC would buy a Kashagan stake and ConocoPhillips would exit.

He said CNPC would pay more than $5 billion for the stake, adding that the transaction would be completed quickly.

Sources familiar with the deal told Reuters last Friday CNPC was set to win Conoco’s stake in the world’s largest oil find in five decades, as Kazakhstan diverts more oil eastward towards energy-hungry China and away from saturated European markets.

They evaluated that CNPC would pay around $5.3-5.4 billion for the stake in the giant offshore field in the Caspian Sea.

Kazakhstan, home to 3 percent of the world’s recoverable oil reserves, has moved in recent years to exert greater management control and secure bigger revenues from foreign-owned oil and gas projects.

KazMunaiGas entered the Kashagan consortium as a shareholder in 2005 and has since then doubled its stake to 16.81 percent.

Kashagan and the neighbouring fields in the North Caspian Sea hold estimated reserves of 35 billion barrels of oil in place, with 9 billion to 13 billion barrels being recoverable.

Kazakh President Nursultan Nazarbayev, who has ruled his resource-rich Central Asian nation of 17 million people for more than two decades, said last week that a multinational consortium developing the field had invested $48 billion in about 13 years, making it the costliest oil project in the world.

During Kashagan’s development, production will be gradually ramped up to 370,000 barrels per day in the second stage from 180,000 bpd in the first stage in 2013-14, according to North Caspian Operating Company (NCOC), which is developing the field.

Italy’s ENI, U.S. major ExxonMobil, Royal Dutch Shell and France’s Total currently all hold 16.81 percent stakes in Kashagan. Japan’s Inpex owns 7.56 percent.

http://uk.finance.yahoo.com/news/kazakhstan-tells-conocophillips-buy-kashagan-114026588.html

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