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ConocoPhillips hasn’t notified the Kazakhstan’s Government on its intention to sell 8.4% in the giant Kashagan oilfield 27 ноября 2012, 14:23

A day before ConocoPhillips announced its intentions in a press-release, according to which the deal is expected to be finalized in the H1 2013.
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Новостью поделились: человек

Oil and Gas Minister Sauat Mynbayev. © Daniyal Okassov Oil and Gas Minister Sauat Mynbayev. © Daniyal Okassov
The US ConocoPhillips hasn’t sent any official notifications to the Kazakhstan’s Government on its intention to sell 8.4% in the giant Kashagan oilfield to India’s ONGC Videsh Limited, Newskaz.ru reports, citing the country’s Minister of Oil and Gas Sauat Mynbayev as saying on the sidelines of a government sitting in Astana. A day before ConocoPhillips announced its intentions in a press-release, according to which the deal is expected to be finalized in the H1 2013. ConocoPhillips’s proceedings from the sale are expected to reach $5 billion. The deal is to be approved of by the Kazakhstan’s Government. “The inter-agency committee [responsible for considering such transactions] hasn’t received any official notifications (…) unofficially we do know that ConocoPhillips is in talks with ONGC. But we do not know if they have come to terms”, Mr. Mynbayev told journalists. He reminded that the “government enjoys the preemptive right to buy out the stake. It’s up to the mentioned above committee to decide whether the government should exercise its right. Besides, all the other consortium member companies do enjoy such a right. Thus, the issue is still open”, the Minister said, adding that the committee might look into the matter for up to two months. “Apart from the question of whether to buy or not, a special expert committee is to evaluate the transaction from the perspectives of safety of national interests”, he said. According to ONGC estimates, as of September 30 the book value of the Kashagan-related assets owned ConocoPhillips stand at $5.5 billion. 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.


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