China set to win Conoco stake in Kashagan: sources
ALMATY/MOSCOW (Reuters) - China is the likely winner of ConocoPhillips' (COP.N) share in Kazakhstan's Kashagan field, giving Beijing a stake in one of the biggest oil finds of the last few decades, three sources familiar with the talks said on Friday.
The purchase would highlight a growing strategic partnership between Kazakhstan and China as Astana diverts more crude eastward towards its energy-hungry neighbor and away from saturated European markets.
A sale of Kashagan equity to a Chinese company would ensure that a healthy share of oil from the Caspian Sea field, containing 12 billion barrels of reserves, will flow over the shared eastern border between the two countries.
One of the source said the Chinese side, likely China National Petroleum Corp CNPET.UL, would pay around $5.3-$5.4 billion for the stake in the North Caspian Operation Company (NCOC), but the final price was not determined. The other two sources did not provide price details.
CNPC was not available for comment.
"(They) will chase (the stake) very aggressively as the Beijing authority is desperate to fill the empty oil pipeline from the Caspian side to Xinjiang," said Keun-Wook Paik, a fellow at the Oxford Institute for Energy Studies specializing in China's energy ties with former Soviet states.
The sale could be a complex three-sided one, with state oil company Kazmunaigas taking control of the 8.4 percent stake in the field operator from ConocoPhillips, which is whittling down its worldwide portfolio, possibly backed by a Chinese loan.
Then the stake could be resold to a Chinese oil company, whole or in part, two of the sources said.
Kazakhstan has pre-emptive purchase rights and its decision is due on Tuesday, July 2.
ConocoPhillips had said it intended to sell the stake to India's state-run Oil and Natural Gas Corp (ONGC.NS) for about $5 billion.
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