Expert: China has a better chance than India of joining development of Kazakhstan’s Kashagan field
Kazakhstan, Astana, June 6 / Trend, D. Mukhtarov /
China has a greater probability than India of joining Kazakhstan's Kashagan field project, senior analyst from the Kazakh Agency for the Study of Profitability of Investments Artem Ustimenko said on Wednesday.
"Today, China has more chances than India to enter the Kashagan project," he told Trend on Wednesday. "Many specialists close to the negotiations for Conoco's share in the project have the same opinion. First of all, they stress the political expediency of choosing China as a future participant of the North Caspian Consortium. China is a more reliable partner, having great financial opportunities to participate in such a capital-intensive project. But a mixed public reaction to the expansion of China's economic presence in Kazakhstan works against it."
Last year, Conoco Phillips announced plans to sell its 8.4 per cent stake in Kashagan to Indian ONGC Videsh Limited for $5 billion. Other partners of the consortium did not use their pre-emption rights. Kazakhstan has the option to resell Conoco's share to China, Kazakh Oil and Gas Minister Sauat Mynbayev said earlier.
In mid-March, Deputy Chairman of the Board on Geology and Perspective Projects of KazMunaiGas National Company Kurmangazi Iskaziev told media that Kazakhstan must determine the purchase of Conoco Phillips's share in Kashagan by May 25, 2013.
It is known that the Indian government approved ONGC's proposal on May 27 to buy a 8.4 per cent stake in the Kashagan project from ConocoPhillips for $ 5.5 billion.
"After officially approving the preliminary conditions of the transaction at the level of government, India informed Kazakhstan and openly supported ONGC's intention to buy ConocoPhillips's share in the North Caspian Consortium," he said. "But the Kazakh government is unlikely to unveil a final decision on the issue until early July, taking into account the country's preservation of the right to acquire an asset."
Moreover, while speaking at a briefing in Astana last month, head of KazMunaiGas National Company Lazzat Kiinov said that the national company does not intend to buy ConocoPhillips's stake in the North Caspian Project (Kashagan).
"Our share of 16.8 per cent is enough for us," he said. "We do not want to be major shareholders in the project."
He also confirmed Oil and Gas Minister Sauat Mynbayev's previous words that the Chinese company shows an interest in entering Kashagan.
"All the issues (who will get ConocoPhillips's share) are being examined," Kiinov said.
It should be recalled that in April, Bloomberg, while citing unnamed sources, reported that Kazakhstan is considering the purchase of Conoco's share worth $5 billion before selling it to the Chinese company.
Kashagan is one of the largest fields discovered in the past 40 years. According to analysts, it has the potential to unite the top five largest oil companies in the world. Kazakh geologists estimate its oil reserves at 4.8 billion tons. According to the project's 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.