Kazakhstani government officials have not yet decided on whether to allow India's OVL to buy into the Kashagan oilfield, Kazakh Foreign Minister Erlan Idrissov said during a visit to New Delhi on March 5.
Idrissov told Indian officials that Astana was still considering whether to let OVL, the international arm of India's state owned Oil and Natural Gas Corporation (ONGC), to buy ConocoPhillips's 8.4% stake in the North Caspian Operating Company (NCOC), the consortium developing the giant Kashagan oilfield. The Kazakhstani government may decide instead to block the deal so that state oil and gas company Kazmunaigas can acquire all or part of ConocoPhillips's stake.
Indian government officials raised the issue with Idrissov during his visit to New Delhi on March 5, but Idrissov told a press briefing that the decision had not yet been made.
ConocoPhillips announced in November 2012 that it had agreed to sell its stake in the Kashagan project to OVL, with the existing members of the NCOC having a 60-day period during which they could decide to exercise their pre-emptive rights to buy the stake. Although none of the consortium members, which include Kazmunaigas exercised their rights before the January 25 deadline, the Kazakh government says it will decide by June 2013 if it wants to block the deal under legislation regulating foreign control of Kazakhstan's strategic assets.
Speaking after talks with Idrissov, his Indian counterpart Salman Khurshid said the meeting had covered Kazakh-Indian cooperations in the areas of defence and civil nuclear energy, as well as the oil and gas sector.
"We reviewed our growing cooperation in the energy sector... We also explored further possibilities of cooperation in the hydrocarbon sector. We requested the support of the government of Kazakhstan for an important bid that OVL is making for a stake in the Kashagan oil field," Khurshid told journalists, Livemint reported
"This is a very complex project and it involves work of partners in the consortium changing hands... It involves a lot of technical, financial issues and therefore everyone is keen that the decision is taken in a well informed, well balanced way," Idrissov told the briefing.
"We of course are aware of the proposal made by ONGC... I hope a decision will be done sooner than later. But let me stress that Kashagan is not the end of life. We have a very successful example of cooperation in the same Caspian Sea area but on a bilateral basis," he added, referring to the acquisition of a 25% share in Kazakhstan's offshore Satpayev block by OVL.
The north Caspian Kashagan field was the largest oilfield discovery in the last three decades, with estimated recoverable reserves of around 13bn barrels of oil. Following many years of delay, production is due to start in the first half of 2013.
The start of commercial oil production is now due to start in June 2013, rather than March as previously expected, Kazinform reported on March 5. At a meeting with the governor of west Kazakhstan's Atyrau region, Baktykozha Izmukhambetov, Agip KCO managing director Umberto Carrara said that the NCOC and the Kazakhstani government had agreed on a June start date.