ConocoPhillips sells interest in Kashagan project
By Aynur Jafarova
The U.S. ConocoPhillips Company has completed transaction with Kazakh KazMunaiGas for the sale of its 8.4 percent interest in the Kashagan project, the company said on October 31.
The company sold its interest in the North Caspian Sea Production Sharing Agreement (Kashagan) for approximately $5.4 billion.
ConocoPhillips announced the company's intention to sell its 8.4 percent interest to Indian ONGC Videsh Limited in November 2012.
Kashagan is one of the largest fields discovered in the past 40 years. The recoverable oil reserves of the field are estimated at 11 billion barrels, while the total geological crude reserves stand at 35 billion barrels.
Its natural gas reserves are estimated at over 1 trillion cubic meters.
Experts believe that any future development of the projects would create opportunities to increase the production volumes significantly, and this would turn Kashagan into one of the largest suppliers of the world energy market.
The North Caspian Operating Company B.V. is the operator of the North Caspian Project.
CNPC became a shareholder in Kashagan with an 8.3 percent interest on 7 September 2013 by acquiring ConocoPhillips's share in the production sharing agreement on the development of the field.
Earlier a source in the Kazakh oil industry told Baku-based Trend news agency that all official procedures for CNPC's joining in the project on the development of the Kashagan field will be completed within a month.
"All the procedures for CNPC's joining in the project on the development of Kashagan should be completed by late October. In case of urgency, the Chinese company will become a competent stakeholder in the project within a month as well," the source said.
Senior analyst of the Agency for Research of Investments Profitability Murat Abulgazin believes that the accession of the CNPC to the project will yield positive results.
"China gives concrete proposals and proposes concrete financing. The company is pragmatic, practical, and works actively. This is normal. While other investors think and trade too much, someone should actively pass to the onset ," Abulgazin said.
According to him, China is interested in the energy resources of the Caspian Sea, as China's economy grows day by day and the demand for energy resources increases accordingly.