From: EurasiaDigest (digest@eurasianet.org)
Date: Mon Jan 31 2005 - 15:37:52 EST
RFE/RL: KAZAKH GOVERNMENT BUYS INTO MAJOR OIL PROJECT
Following months of negotiations, the international consortium formed in 1997 to exploit Kazakhstan's Kashagan oil field, which has estimated reserves of between 7 billion and 9 billion tons, has agreed to sell half of British Gas's (BG) 16.67 percent stake to the Kazakh government, international media reported on 28 and 31 January. That stake is valued at $1.23 billion, according to "The Wall Street Journal" on 31 January. The sale is to be finalized on 2 February; it is not clear who will acquire the other half of BG's stake. BG announced in late 2002 its intention to sell its stake in Kashagan, but the remaining shareholders in the consortium -- operator ENI (16.67 percent), ExxonMobil (16.67 percent), TotalFinaElf (16.67 percent), Royal Dutch-Shell (16.67 percent), ConocoPhillips (8.33 percent), and Japan's INPEX (8.33 percent) -- blocked BG's plans to sell that stake to two Chinese companies in the hope of dividing it among themselves. Then the Kazakh government insisted that under Kazakh law it has fir
st refusal. Production at Kashagan was originally scheduled to begin in late 2005; the consortium paid $150 million in compensation last year to the Kazakh government when it became clear that it would not be possible to begin production before 2007-08. LF
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