Kazakhstan says may seek to buy just part of BG' Kashagan stake

21.10.04 11:08
/REUTERS, Astana, October 21, 04/ - Kazakhstan, keen to buy out a 16.67 percent stake in the huge Kashagan offshore oilfield held by BG, said on Thursday it might eventually seek to buy just part of this share. "We are still in talks and insist on our right to buy out the BG's stake," Energy Minister Vladimir Shkolnik told the Senate upper chamber of parliament. "(But) maybe the talks will not be about the whole stake." Shkolnik's remarks came one day after the Central Asian state's parliament passed amendments to the subsoil law that will give the state first refusal rights on stakes in oil and minerals joint ventures that foreign firms want to sell. Other members of the ENI-led Kashagan consortium have agreed to buy BG's stake, but Kazakhstan has argued it has the pre-emptive right to do so because it is not a third party but a "host state". To become law, the new subsoil bill has to be approved by the compliant Senate and finally signed by President Nursultan Nazarbayev. Shkolnik said the next round of talks with the consortium would be held on October 28-29. The minister had said earlier that the government was ready to pay "in the order of $1 billion" for BG's stake. Asked by one of the senators where the government planned to raise the money, Shkolnik said: "There is a wealth of financial mechanisms we are looking at, and I hope we will choose the one optimal for our state interests." The struggle to agree between Kazakhstan, BG and the rest of the North Caspian Production Sharing Agreement - ENI, Royal Dutch/Shell, ExxonMobil, Total, ConocoPhillips and Japan's Inpex - has dragged on for months. Kazakhstan pins hopes of its future prosperity on developing giant oil fields like Kashagan and aspires to triple its oil output to over 3.0 million barrels per day by 2015. The government says the multinational consortium will only benefit if Kazakh state oil and gas firm KazMunaiGas joins in. Consortium members say that so far the wrangling has not delayed work to start pumping Kashagan oil in 2008. [2004-10-21]