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KMG to buy ConocoPhillips' stake in Kashagan for $5 billion

03 july 2013, 20:26
0
KazMunaiGas headoffice. Photo by Danial Okassov©
KazMunaiGas headoffice. Photo by Danial Okassov©
ConocoPhillips will sell its 8.4-percent stake in Kashagan to KazMunaiGas for $5 billion, Tengrinews.kz reports citing the company’s official website.

Earlier Kazakhstan Ministry of Oil and Gas Ministry notified ConocoPhillips on Kazakhstan's intention to exercise its preemptive right to purchase the stake in Kashagan and the North Caspian Sea Production Sharing Agreement.

ConocoPhillips confirmed has receipt of the official notification from the Ministry on its intention to procure the 8.4-percent stake in Kashagan based on its preemptive right that is granted to Kazakhstan by its Subsoil Law.

The Ministry appointed Kazakhstan's national oil and gas company KazMunaiGas to purchase ConocoPhillips’ stake in Kashagan. “The proceeds that ConocoPhillips will receive as a results of the deal exercising Kazakhstan's preemptive right will remain at approximately $5 billion, including customary adjustments,” ConocoPhillips writes.

KMG has started working on all required approvals, including the permit of the Anti-Monopoly Agency of Kazakhstan. The deal is expected to be completed by Q4 2013.

“The decision of the Kazakhstan government to exercise its preemptive right demonstrates the value of this asset and moves us closer to completing this transaction,” said Don Wallette, executive vice president, Commercial, Business Development and Corporate Planning.

According to him, selling the asset in Kashagan project is part of the company’s plan on increasing its value through optimization of its portfolio that focuses on investments that provide for “growth in production and cash margins, improved returns on capital, and a compelling dividend”.


By Azhar Ashirova


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