(Adds background, details)
By Katya Golubkova
MOSCOW, July 1 Chinese state oil firm CNPC
will buy a stake in Kazakhstan's giant Kashagan oil
project, through back-to-back deals with Kazmunaigaz through
which ConocoPhillips will exit, the Kazakh state oil
firm said on Monday.
Lyazzat Kiinov, chief executive of Kazmunaigaz, confirmed
the deal structure on the fringes of a summit of gas exporting
nations in Moscow, telling Reuters that CNPC would pay more than
$5 billion for the stake.
Conoco, which is in the process of whittling down its
worldwide portfolio, has an 8.4 percent stake in the Kashagan
project operator. Kiinov said he hoped the transaction would be
Sources familiar with the deal told Reuters last Friday CNPC
was set to win Conoco's stake in the world's largest oil find in
five decades, as Kazakhstan diverts more oil eastward towards
energy-hungry China and away from saturated European markets.
They evaluated that CNPC would pay around $5.3-5.4 billion
for the stake in the giant offshore field in the Caspian Sea.
Kazakhstan, home to 3 percent of the world's recoverable oil
reserves, has moved in recent years to exert greater management
control and secure bigger revenues from foreign-owned oil and
Kazmunaigas entered the Kashagan consortium as a shareholder
in 2005 and has since then doubled its stake to 16.81 percent.
Kazakh President Nursultan Nazarbayev and visiting British
Prime Minister David Cameron on Sunday cut the ribbon to open
the Bolashak (Future) oil plant which will process crude flowing
Kashagan, with reserves estimated at 35 billion barrels of
oil in place, is expected to produce its first oil in September.
Nazarbayev, who has ruled his resource-rich Central Asian
nation of 17 million for more than two decades, said last week
that a multinational consortium developing the field had
invested $48 billion in about 13 years, making it the costliest
oil project in the world.
During Kashagan's development, production will be gradually
ramped up to 370,000 barrels per day in the second stage from
180,000 bpd in the first stage in 2013-14, North Caspian
Operating Company (NCOC), which develops the field, said in a
"Future development projects bear the potential to
significantly increase production volumes and position Kashagan
as an important contributor to the world energy market," it
Italy's ENI, U.S. major ExxonMobil, Royal
Dutch Shell and France's Total currently all
hold 16.81 percent stakes in Kashagan. Japan's Inpex
owns 7.56 percent.
(Reporting by Katya Golubkova; Writing by Douglas Busvine and
Dmitry Solovyov, editing by Jeff Coelho)