Kazakhs would keep Caspian oil stake, if BG sells

/REUTERS, Astana, September 13, 04/ - Kazakhstan would hold on to a stake in the Caspian Sea's huge Kashagan oilfield if BG sold it the stake and other consortium members agreed to let the deal go ahead, its energy minister said on Monday. Asked if agreement on the stake sale had been reached, Energy Minister Vladimir Shkolnik said: "Not yet". The most recent round of talks was held in London in July, he said. BG has been trying to offload its 16.67 percent stake in Kashagan, one of the biggest oil discoveries in decades, since March 2003 when it agreed to sell to two Chinese firms. That deal was scuppered when five of the six consortium members exercised a contractual right to buy the stake first, only for Kazakhstan to say it held pre-emptive rights to buy because it is the ultimate owner of Kazakh mineral resources. Shkolnik denied speculation that his country was seeking to buy the stake in order to sell it on to China at a higher price. He has previously said Kazakhstan would pay in the order of $1 billion for the stake. "Nobody is going to sell anything to anybody," he told foreign reporters in the capital Astana. "If you can get my words to the shareholders of the (consortium) company shareholders, I can tell you: Kazakhstan's direct participation in this project increases its viability and chances of success." The other partners of the North Caspian Production Sharing Agreement are ExxonMobil, Total, and Royal Dutch/Shell as well as ConocoPhillips and Japan's Inpex, the only firm not to object to the original sale. Shkolnik said the continuing wrangling over the BG stake would not delay production at Kashagan, which has already been pushed back to 2008 due to technical difficulties drilling in one of the shallowest parts of the Caspian. According to Shell estimates, ultimate recovery from Kashagan, discovered in 2000 and to be exploited until 2041, is estimated to be up to 13 billion barrels of oil. The vast Central Asian nation is rapidly scaling the league table of world oil producers and plans to produce 3.0 million barrels a day of crude by 2015 from about 1.15 million bpd now, thanks in large part to its sector of the Caspian Sea. Tenders for further Caspian Sea blocks will be held next year, Shkolnik said, without giving details. Kazakhstan exports most of its oil via Russia, but is building a pipeline to China and buying a tanker fleet for the Caspian Sea, to serve a new pipeline from Baku in Azerbaijan to Ceyhan on Turkey's Mediterranean coast. Its first 12,000-tonne tanker is due to be delivered in November and it plans to expand the fleet to six over the next three to four years, Shkolnik said. [2004-09-13]