By OGJ editors
HOUSTON, Feb. 3 -- Kazakhstan has agreed to buy half of BG PLC's 16.67% stake in the Agip KCO consortium, which is developing Kashagan oil field and others in the northern Caspian Sea.
Kazakhstan Minister of Energy and Minerals Resources Vladimir Shkolnik announced the transaction, expected to close by Mar. 31, but did not disclose terms.
The production-sharing agreement (PSA) operated by the consortium covers more than 5,600 sq km. Kashagan reserves are estimated at 7-9 billion boe, BG said. The consortium plans to start production in 2007-08.
The state has preemptive rights to buy shares in extractive projects, Shkolnik said. The process of purchasing shares in a number of projects has started, he said.
Previously, BG had 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 PSA for $615 million (OGJ, Mar. 17, 2003, p. 42).
But the other partners agreed to purchase BG's interest, preempting BG's plans to sell the stake to Chinese companies (OGJ Online, May 16, 2003).
ENI PSA 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 16.67%, and Total SA 16.67%. Agip Caspian is the operator.