Shell says no objection to Kazakh buy-in to Kashagan

22.09.04 11:08
/REUTERS, London, September 22, 04/ -- Royal Dutch/Shell has no objection in principle to the Kazakh government's wish to buy a stake in a project to develop the country's giant Kashagan oilfield, Shell's upstream chief said on Wednesday. "We don't see any objection to the Kazakh government's involvement in Kashagan but it has to be done on appropriate commercial terms," said Malcolm Brinded, Shell's head of exploration and production. "We have to be sure and they have to be confident that they can support the project as an investment partner," he told reporters during Shell's strategy presentation. Kazakhstan has said it wants a buy-in if BG sells its 16.67 percent stake in Kashagan, one of the biggest oil discoveries in decades, and other consortium members agree to let the deal go ahead. BG has been trying to offload its stake in the Caspian Sea development 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. The other partners of the North Caspian Production Sharing Agreement are ExxonMobil, Total, ConocoPhillips and Japan's Inpex. 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. [2004-09-22]