Azerbaijan, Baku, Nov 27 /Trend E. Kosolapova/
Kazakhstan is unlikely to acquire an 8.4 per cent stake of the U.S. firm ConocoPhillips in the Kashagan project and therefore bring its stake in the project to the majority, expert at the Kazakhstan Institute of Political Solutions Sergey Smirnov said.
"It is unprofitable for Kazakhstan to acquire an 8.4 per cent, because then it will have more than a 25 per cent share in the project. Moreover, it would pay for a share which is estimated at $5 billion and will have to fund the development of Kashagan in accordance with its 25 per cent stake. An increase in the share of the project would result in a significant increase in costs. Moreover, the capital cost of the project has already grown from the original $24 billion to $136 billion," Smirnov said.
At the same time the expert does not rule out the possibility of the distribution of the ConocoPhillips share between the main shareholders of the project, including Kazakhstan.
"The best option for Kazakhstan which has no experience in the development of offshore fields will be the maintenance of parity. And dominance in the project with dim prospects, as the starting date of developing the oil has been repeatedly postponed, will be unprofitable for Kazakhstan," Smirnov said.
As to the possible accession of Kazakhstan to the shareholders of the Indian state oil company ONGC, to which a ConocoPhillips share is proposed, then Smirnov believes that the company will not affect the timing of project development.
"The Indian company has no experience in the development of such a complex field as Kashagan from a geological point of view. Even the current shareholders are faced with great difficulties. It can only help in financing this project," the expert said.
ConocoPhillips previously announced its intention to sell its stake in the Kashagan field development project to a unit of the Indian state oil company ONGC, responsible for international projects of ONGC Videsh Limited. In turn, the Minister of Oil and Gas of Kazakhstan Sauat Mynbayev told reporters that Kazakhstan and other shareholders have the priority right to purchase shares of ConocoPhillips in the project.
Kashagan is one of the largest fields discovered in the past 40 years. According to analysts, Kashagan has the potential to unite the top five largest oil companies in the world. Kazakh geologists estimate geological oil reserves of 4.8 billion tons. According to the project operator, total oil reserves are 38 billion barrels (six billion tons), with a recoverable volume of about 10 billion barrels. Natural gas reserves are estimated at over one trillion cubic meters.
The companies developing the project are planning to begin commercial production on Kashagan in the first quarter of 2013.
At present the Kashagan project participants are Eni, Royal Dutch Shell, Exxon Mobil, Total and KazMunaiGas, which owns equal shares (16.81 per cent), as well as ConocoPhillips - 8.4 per cent and Japan's Inpex - 7.55 per cent.