Financial Times: Further Kazakh twist in BG move: “The Kazakh intervention has caused tension between the various groups with a stake in the project - Royal Dutch/Shell, Italy's Eni, Total, ExxonMobil, ConocoPhillips and Japan's Inpex.” (ShellNews.net)
By James Boxell
Published: October 22 2004
BG Group's long-running bid to sell its interest in Kazakhstan's vast Kashagan oilfield took a further twist yesterday as the Kazakh government said it might only be interested in buying part of the $1.2bn (£660m) stake.
The gas group has been trying to offload the stake since early last year but has been beset by delays as its original plan to sell to two Chinese oil companies was blocked by its partners in the $30bn Kashagan project, who were in turn blocked by the Kazakh government.
The Kazakhs had been looking to buy BG's complete 16.7 per cent stake but Vladimir Shkolnik, energy minister, said yesterday: "Probably the [aim] is to buy not all of BG's stake but we are certain to buy a part of it." Mr Shkolnik said he would be meeting with the partners in the Kashagan project on October 28 and 29, although BG said it was unaware of any such meeting. It is understood that a meeting about the stake sale is more likely to take place in early November.
Kashagan is one of the world's biggest oil finds in the past 30 years and is estimated to hold minimum recoverable reserves of between 9bn and 13bn barrels.
The Kazakh intervention has caused tension between the various groups with a stake in the project - Royal Dutch/Shell, Italy's Eni, Total, ExxonMobil, ConocoPhillips and Japan's Inpex.
Shell and Eni are understood to be relaxed about the Kazakh government's participation but some of the other groups are less happy.
BG had agreed in March 2003 to sell to Sinopec and CNOOC of China but the other project partners, excluding Inpex, exercised a contractual right to pre-empt the sale and acquire the stake themselves.
The Kazakh government then said it had the right to pre-empt the sale to the partners, something it is seeking to ratify through law.
BG said: "Our position remains unchanged. We have the sales purchase agreements in place to sell our entire stake to the pre-empting partners."