ASTANA (Reuters) - China has shown an interest in buying the stake of U.S. oil major ConocoPhillips (COP.N) in a multinational consortium developing Kazakhstan’s giant Kashagan oilfield, Kazakh Oil & Gas Minister Sauat Mynbayev said on Tuesday.
“Kazakhstan has not yet taken such a decision, but there is such a possibility,” Mynbayev told reporters. He declined to say which company or government body represented China in talks with Kazakhstan over Kashagan.
Kazakhstan, Central Asia’s largest oil producer and the second-largest post-Soviet producer after Russia, has the pre-emptive right to buy out the 8.4-percent stake owned by ConocoPhillips in Kashagan.
ConocoPhillips, which has been shedding overseas assets to cut debt and increase its investment in lower-cost domestic shale oil and gas, has said it intends to sell its Kashagan stake to India’s state-run oil and Natural Gas Corp (ONGC.NS) for about $5 billion.
Kazakhstan has until late May to decide whether to buy out the stake of ConocoPhillips, and Mynbayev said that further options would depend on the terms to be proposed by other parties also wishing to own this stake.
He declined to speculate whether India or China would have a better chance of owning the stake.
“If the terms offered by one side are significantly better than those of the other potential buyer, then the logic (of choice) of the authorities of Kazakhstan will be crystal-clear,” Mynbayev said.
Kashagan, the world’s biggest oilfield discovery in more than 40 years, holds an estimated 30 billion barrels of oil-in-place, of which 8 billion to 12 billion barrels are potentially recoverable, with first production expected in the middle of this year.
Kazakhstan, a vast nation of 17 million, is home to 3 percent of the world’s recoverable oil reserves. It has moved in recent years to exert greater management control and secure bigger revenues from foreign-owned oil and gas developments.
Kazakh state oil firm KazMunaiGas first entered the Kashagan consortium in 2005 as a shareholder in 2005 and later doubled its stake to 16.81 percent.
Reporting by Raushan Nurshayeva; Writing by Dmitry Solovyov; Editing by Maya Dyakina and Mark Potter