Eric Watkins
Senior Correspondent
LOS ANGELES, May 4 -- Kazakhstan's national oil company KazMunaiGaz has signed the final documents to purchase half of British Gas Group's stake in a project to develop Kashagan oil field in the Caspian Sea.
KazMunaiGaz and members of an international consortium led by Italy's ENI SPA finalized the deal in which the Kazakh firm bought 8.33% of BG's stake for $913 million. BG said it plans to sell its remaining 8.33% to the other consortium members.
ENI holds a 16.67% interest in the project. Partners are ExxonMobil Kazakhstan Inc. 16.67%, ConocoPhillips 8.33%, Tokyo-based Inpex Corp. 8.33%, Royal Dutch/Shell Group 16.67%, and Total SA 16.67%. ENI unit Agip Caspian serves as operator.
BG initially announced it was willing to sell its share in the Agip KCO consortium in two transactions to units of CNOOC Ltd. and China Petrochemical Corp. (Sinopec). CNOOC and Sinopec each agreed to acquire an 8.33% interest in the production sharing agreement for $615 million (OGJ, Mar. 17, 2003, p. 42).
Instead, the other stakeholders agreed to purchase BG's interest, preempting BG's plans to sell to the Chinese companies, but the Kazakh government suspended that deal, claiming it had preemptive rights to the stake (OGJ Online, May 16, 2003).
Kashagan field holds an estimated 5.29 billion tonnes of oil, with production due to start in 2007-08.