Kazakhstan, China agree on sale of share in Kashagan field
By Aynur Jafarova
Kazakhstan and China agreed on the sale of share in the project on development of giant Kashagan field located in the Kazakh section of the Caspian Sea to the Chinese energy giant China National Petroleum Company (CNPC), Chinese President Xi Jinping, who was on an official visit to Kazakhstan on September 6 - 8, said at a press conference in Astana on Saturday, RIA Novosti reported.
"An agreement was achieved on China's share in the Kashagan field," Jinping said after the talks with his Kazakh counterpart Nursultan Nazarbayev.
Furthermore, the heads of two national companies - CNPC and KazMunaiGas signed an agreement on sale of KMG's 8.3 percent share to CNPC.
The program of strategic partnership between CNPC and KazMunaiGas was signed as well.
In July 2013, the Kazakh Oil and Gas Ministry said Kazakhstan intends to use the priority right to acquire the share of ConocoPhillips in the production sharing agreement on the development of the Kashagan field.
Earlier, KazMunaiGas head Lazzat Kiinov said in an interview with Reuters that the Chinese company CNPC will buy a stake in the Kazakh Kashagan oil field on the Caspian shelf for over $5 billion.
Kashagan is one of the largest fields discovered in the past 40 years. Recoverable oil reserves of Kashagan are estimated at 11 billion barrels, whereas total geological crude reserves stand at 35 billion barrels. It is believed to be the largest oil field in the world after Prudo Bay in Alaska. Besides, natural gas reserves are estimated at over 1 trillion cubic meters.
The Kashagan commissioning is a sequential process that involves more than 40 actions preceding the commencement of production and gradual reaching of the target level due to the scale and complexity of the project.
Production is planned to gradually increase over the second half of 2013. It is expected that around 180,000 barrels per day will be extracted at the first phase, and the figure will reach 370,000 bpd during the second phase.
Experts believe that the increase of oil production in Kazakhstan completely depends on the start of the Kashagan output as it is currently the only oil field capable of significantly boosting domestic oil production.
The future development projects would open up the opportunities to increase the production volumes significantly and this will turn Kashagan into one of the largest suppliers for the world energy market.
Bilateral documents inked
Nazarbayev and Jinping signed a number of bilateral documents, including the Declaration on further development of multilateral strategic partnership between the countries, the agreement between the governments of Kazakhstan and China on mutual provision of lands for construction of diplomatic missions' buildings, intergovernmental agreement on cooperation in the exploration and use of cosmic space for peaceful purposes, medium-term and long-term program of development of Kazakh-Chinese trade and economic cooperation till 2020, the agreement between the governments of two countries on the use and management of Dostyk joint hydro-system on Horgos river, the Memorandum on cooperation in the sphere of implementation of projects for complex processing of coal between the Ministry of Industry and New Technologies of Kazakhstan and the State Energy Agency of China, the Agreement on cooperation between JSC NC KTZ and the People's Government of Lianyungang city.
Furthermore, at the meeting of the Kazakh-Chinese Business Council Chairman of the Board of Samruk-Kazyna Fund Umirzak Shukeyev and Chairman of the Board of Directors of CITIC Corporation Chang Zhenmin signed an agreement on the implementation of so-called "Investment map", which includes monitoring and implementation of 21 projects in Kazakhstan with a total cost of $22 billion.
They also signed an agreement of intention on cooperation between the National Welfare Fund Samruk-Kazyna and CITIC Group Corporation.
Joint statement issued
According to a joint declaration issued by the presidents of both countries, China and Kazakhstan agreed to boost their cooperation in security, law enforcement and intelligence sharing.
According to the document, the two countries agreed that terrorism, separatism and extremism, as well as transnational organized crimes, including illegal arms and drug trafficking, and economic crimes, have posed a serious threat to the security and stability of Central Asian nations.
Beijing and Astana will continue to cooperate with each other both bilaterally and within such international organizations, the document said.
Furthermore, according to the joint declaration, both countries support the international community to help Afghanistan with its reconstruction on the condition of respect for the nation's sovereignty, independence and territorial integrity and to jointly promote peace, stability and development in Afghanistan and in the region.
China and Kazakhstan also agreed to promote bilateral trade and energy cooperation and push forward their natural gas pipeline project.
In the document, the two sides vowed to keep on tapping potential in economic and trade cooperation, optimizing bilateral trade structure, promoting trade facilitation, building more platforms and working toward the goal of increasing bilateral trade volume to $40 billion in 2015.
The Chinese - Kazakh relations have enjoyed rapid development since the establishment of diplomatic relations. China is the largest trading partner of Kazakhstan and Kazakhstan is China's second largest trading partner in the Commonwealth of Independent States (CIS) region after Russia.
Chinese Ambassador to Kazakhstan Le Yucheng said in an interview on the eve of Chinese President Xi Jinping's visit to Kazakhstan that the trade turnover between Kazakhstan and China will exceed $30 billion in 2013.