Source: China to join Kazkahstan’s Kashagan project
Kazakhstan, Astana, June 20 / Trend, D. Mukhtarov /
China will join the Kashagan oil field project in Kazakstan, an informed source told Trend on condition of anonymity on Thursday.
"China will become one of the shareholders in the Kashagan international consortium; the foreign partners of the consortium are not against this," the source said.
Currently, there are two contenders for the share of US company Conoco Phillips: the oil companies of China and India.
"Both China and India are advantageous buyers for Kazakhstan. But when choosing to, the price of choosing China, as well as the diversification of oil flows to global markets might play a role in the choice. Transport routes for large amounts of Kazakh oil to China in the future are more profitable, but at the same time, CPC may remain the major route," the source said.
According to him, the advantage of transportation in the eastern direction is indicated by the fact that Total and Eni are in talks with China on the conditions of future supplies.
Kashagan is a major hydrocarbon deposit in the north of the Caspian Sea with geological oil reserves of 4.8 billion tons. The 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.
An agreement was signed in late May of 2012 to settle certain issues between the Kazakh Government and contracting companies working on the North-Caspian project. According to agreements, the parties approved an amendment to the plan and the development budget of the Kashagan. It authorizes commercial production in the period from December 2012 to June 2013.
The launch of oil production at "Kashagan" was postponed several times. The consortium of foreign companies led by Eni initially promised to guarantee commercial production in 2008, later it was postponed until 2011. Another memorandum was later signed. Commercial oil production at the "Kashagan" field in the Caspian Sea was postponed until 2013.
At present, the Kashagan project's participants are Eni, Royal Dutch Shell, Exxon Mobil, Total and KazMunaiGas, which own equal numbers of shares (16.81 per cent), as well as ConocoPhillips - 8.4 per cent and Japan's Inpex - 7.56 per cent.