No decision on buying ConocoPhillips’ stake in Kashagan yet 22 января 2013, 11:41
Kashagan oil and gas field. ©REUTERS
The official Astana hasn’t taken any decision on possible purchase of ConocoPhillips’ (8,4%) share in the giant Kashagan oilfield, Newskaz.ru reports, citing the country’s Minister of Oil and Gas Sauat Mynbayev said when speaking on the sidelines of the government sitting January 22.
According to the Company’s press-release as of late November, the deal to sell the stake to India’s ONGC Videsh Limited was expected to be finalized in the H1 2013. ConocoPhillips’s proceedings from the sale were expected to reach $5 billion. The deal was to be approved of by the Kazakhstan’s Government that enjoys the priority right to purchase the stake.
“The Government and all the partner companies enjoy the preemptive right to purchase the stake. Both the Government and the partners are thinking of their possibilities. The time for a decision isn’t over yet. No final decision has been taken yet”, Mr. Mynbayev said.
The Minister emphasized that the decision is to be taken by a special inter-agency committee that is carefully studying the issue at the moment.
“We have some months to take a decision, whereas partner companies’ time is shorter”, he said.
The Kashagan field, named after a 19th century Kazakh poet from Mangistau, is located in the Kazakhstan sector of the Caspian Sea and extends over a surface area of approximately 75 kilometers by 45 kilometers. The reservoir lies some 4,200 meters below the shallow waters of the northern part of the Caspian Sea and is highly pressured (770 bar of initial pressure). The crude oil that it contains has high ‘sour gas’ content.
The development of Kashagan, in the harsh offshore environment of the northern part of the Caspian Sea, represents a unique combination of technical and supply chain complexity. The combined safety, engineering, logistical and environmental challenges make it one of the largest and most complex industrial projects currently being developed anywhere in the world.
According to Kazakhstan geologists, geological reserves of Kashagan are estimated at 4.8 billion tons of oil. According to the project’s operator, the oilfield’s reserves are estimated at 38 billion barrels, with 10 billion barrels being recoverable. Besides, natural gas reserves are estimated at over 1 trillion cubic meters. The consortium developing the field comprises Eni, Shell, ExxonMobil, Total and KazMunaiGaz (all with a 16.81% stake) as well as ConocoPhillips (8.4%) and Japan's Inpex (7.56%).
Tengrinews.kz reported late May that Kazakhstan and NCOC companies had signed an agreement to start commercial production at the giant Kashagan oilfield in the period from December 2012 to June 2013.
NCOC, a consortium developing the giant Kashagan oilfield, plans to produce 75 000 barrels of oil per day at the initial production stage, Tengrinews.kz reported mid-May 2012, citing NCOC Vice Managing Director Zhakyp Marabayev as saying on the sidelines of a CIS summit on oil and gas.
According to him, plans are there to bring the production figure up to 350 000 barrels a day or even up to 450 000 barrels a day at the first stage of the oilfield development.
“The current facilities enable to produce up to 350 000 barrels a day (…) Should the gas injection capacities be expanded, we could produce up to 450 000 barrels a day”, he said at that time.
Early October 2012 Tengrinews.kz reported, citing Kazakhstan’s Oil and Gas Minister Sauat Mynbayev as saying October 2 on the sidelines of the KazEnergy Oil Conference held in Astana, that ConocoPhillips might exit the project.