By OGJ editors
HOUSTON, Mar. 10 -- CNOOC North Caspian Sea Ltd., a wholly owned subsidiary of CNOOC Ltd. of China, reported Friday that it will acquire from BG Group subsidiary BG International Ltd. an 8.33% interest in the North Caspian Sea production sharing agreement project for $615 million.
The project covers 5,600 sq km of the Caspian Sea and includes Kashagan field, which contains reserves of 13 billion boe; the Kalamkas discovery; and three exploration prospects: Kairan, Aktote, and Kashagan SW. Production has not yet commenced within the project.
"This acquisition allows the company to gain a firm foothold in one of the world's most prolific oil and gas basins and provides the potential for significant reserve growth and visibility in long-dated production growth," said Wei Liucheng, CNOOC Ltd. chairman and CEO.
The purchase represents a 1/12th ownership in the project, which is owned by a consortium of other partners including operator ENI-Agip SPA, ExxonMobil Corp, Royal Dutch/Shell Group, and TotalFinaElf SA—each holding 16.67%—and ConocoPhillips and Tokyo-based Inpex Corp., each with 8.33%. BG also will retain an 8.33% interest.
"This disposal arises from BG's regular process of portfolio review, and the proceeds will be utilized to further our aims of growing the business and strengthening returns," said BG Chief Executive Frank Chapman. "BG remains strongly committed to Kazakhstan, one of the most important countries in our portfolio," he added. "In addition to our remaining interest in the North Caspian, we will continue to contribute through our involvement in the giant gas condensate field at Karachaganak and in the Caspian Pipeline Consortium," he added.
The transaction will be retroactive to Jan. 1, but its completion "is subject to satisfaction of a number of conditions, including the waiver of certain preemptive rights and receipt of governmental approvals," CNOOC said. The sale is expected to be finalized this year, BG said.
Credit Suisse First Boston and Merrill Lynch are CNOOC's financial advisorson the de