* U.S. company ready to sell Kashagan stake-Kazakh officials
* Kazakhstan to get first option on 8.4 pct stake
* Kashagan key to planned 60 pct growth in Kazakh oil output
* Consortium partners seek assurances on second phase
By Robin Paxton and Mariya Gordeyeva
ASTANA, Oct 2 U.S. oil major ConocoPhillips
is ready to exit the consortium developing Kazakhstan's
Kashagan oil field, Kazakh officials said, giving the state
first option on increasing ownership of the biggest oil find
since the 1960s.
A more assertive Kazakhstan, seeking greater returns on the
large energy projects that will drive central Asia's biggest
economy over the next decade, has sought to revise deals struck
with foreign energy companies in the lean post-Soviet years.
Asked on Tuesday whether ConocoPhillips would sell its stake
in the consortium, Kazakh Oil and Gas Minister Sauat Mynbayev
told reporters: "They have informed that they have the intention
ConocoPhillips would not confirm its plans for the Kashagan
stake. "Unless formally announced by our company, ConocoPhillips
does not comment on ongoing business development or commercial
activities," spokesman Daren Beaudo said in an email.
The Houston-based company, however, has been conducting a
disposal programme to reduce its non-core overseas assets. It
has already exceeded its target of asset sales worth $20 billion
by the end of 2012, including the sale of its stake in LUKOIL
, Russia's second-biggest oil producer. Proceeds from
the disposals are to be used for debt reduction, dividend
payments and exploration.
Kazakhstan, home to 3 percent of the world's recoverable oil
reserves, has moved to exert greater management control and
secure bigger revenues from foreign-owned oil and gas
Previous reshuffles of North Caspian Operating Company
(NCOC), the consortium developing Kashagan, have seen state
company KazMunaiGas muscle in, prompting Western partners to
seek assurances that they will be able to develop the offshore
field's more lucrative second phase.
KazMunaiGas first entered the Kashagan consortium as a
shareholder in 2005 and later doubled its stake to 16.81
percent. Identical stakes are held by Exxon Mobil, Royal
Dutch Shell, Italy's Eni and French company
Total. Japan's Inpex owns 7.56 percent.
The Kazakh state company would have first option on buying
the 8.4 percent stake owned by ConocoPhillips, and Chief
Executive Lyazzat Kiinov said it was "displaying interest" in
buying the stake.
Daniyar Berlibayev, Kiinov's deputy at KazMunaiGas, also
indicated that ConocoPhillips planned to sell its stake. Whether
or not KazMuaniGas would acquire the share would depend on the
price, he said.
"They will exit the project, but nobody has come to us with
an offer," Berlibayev told Reuters. "We, as the national
company, wouldn't refuse the idea of increasing our share. How
we might finance this is another question."
Exxon Mobil, the world's biggest non-state oil company,
would be a possible buyer of the stake if KazMuaniGas decided
not to pursue its interest in the ConocoPhillips stake. Exxon
Mobil senior vice-president Mark Albers declined to comment when
asked about his company's plans for Kashagan.
Kazakhstan, the world's ninth-largest country by area but
with a population of only 17 million, expects Kashagan to be one
of three main drivers of its plans to raise oil output by 60
percent by the end of the decade.
Mynbayev said that Kazakhstan planned to raise output to 130
million tonnes by 2020, from 81 million tonnes this year,
through expansion at Kashagan, the Chevron-led Tengiz
field and the Karachaganak oil and gas condensate field
Kashagan's first phase, which has been delayed by rising
costs and technical complications, is likely to pump its first
oil by the end of March 2013, the minister said.
The first phase of production is expected to yield between
370,000 and 450,000 barrels per day (bpd). A second phase, yet
to be agreed with the government, could raise output to 1
With output set to begin, consortium members are lobbying
for assurances that they will be able to recoup the tens of
billions of dollars already invested before the expiry of their
40-year production-sharing agreement, signed in 1997.
President Nursultan Nazarbayev, who has ruled Kazakhstan
throughout its two decades of independence, has already talked
to ENI Chief Executive Paolo Scaroni to discuss "cooperation in
the oil and gas sector", including Kashagan, his website said.