ASTANA (Reuters) - U.S. oil company ConocoPhillips (COP.N) is ready to sell its stake in the giant Kashagan oil field, Kazakhstan’s oil minister said, as the Central Asian nation tries to wring increasing revenue from foreign-owned oil and gas developments.
Kazakhstan, home to 3 percent of the world’s recoverable oil reserves, has sought in recent years to revise deals struck with foreign energy firms in lean post-Soviet years and boost its returns from foreign oil and gas companies.
Development of the mammoth offshore field, the biggest oil discovery since Prudhoe Bay in Alaska in the 1960s, has been beset by delays, rising costs and technical complications since it was declared commercially viable 10 years ago. Oil production is now expected to begin in March 2013.
Kazakh Oil and Gas Minister Sauat Mynbayev said that ConocoPhillips is ready to sell its 8.4 per cent stake in North Caspian Operating Company (NCOC), the consortium developing Kashagan. “They have informed that they have the intention of selling,” he told reporters.
Lyazzat Kiinov, head of Kazakh state oil company KazMunaiGas, said that the company was “displaying interest” in buying the ConocoPhillips stake.
ConocoPhillips was not immediately available to comment on the oil minister’s claim.
KazMunaiGas and six international oil companies control NCOC. KazMunaiGas, Eni (ENI.MI), ExxonMobil (XOM.N), Royal Dutch Shell (RDSa.L) and France’s Total (TOTF.PA) each own about 16.8 percent. Japan’s Inpex (1605.T) owns 7.56 percent, with ConocoPhillips completing the group.
Mynbayev said that Kashagan was expected to produce its first oil by the end of March 2013.
“The consortium had the intention of starting production this December, but it looks like they won’t manage it. They will move it to some time around the end of March,” Mynbayev told reporters on the sidelines of an international energy conference.
Kazakhstan, the world’s ninth-largest country by area but with a population of only 16.7 million, expects the field in the Caspian Sea to be the main driver of its plans to raise oil output by 60 percent by the end of the decade, from 80 million metric tonnes (88.18 million tons) in 2011.
Additional reporting by Mariya Gordeyeva; Writing by Dmitry Solovyov; Editing by David Goodman