July 2 (Bloomberg) -- The Kazakh government will exercise its right of first refusal and acquire the stake held by ConocoPhillips in the nation’s biggest oil field, squeezing out Oil & Natural Gas Corp.
The Kazakh Oil and Gas Ministry has informed ConocoPhillips it will buy the U.S. oil company’s 8.4 percent interest in the Caspian Sea oil project, the Astana-based ministry said today in an e-mailed statement. State-owned KazMunaiGaz National Co. will carry out the purchase on behalf of the government.
ConocoPhillips said in November it intended to sell its stake in Kashagan for about $5 billion to Oil & Natural Gas, India’s biggest energy explorer. Kazakh law allows the central Asian nation to exercise an option to step in and buy that stake in place of the Indian company.
China National Petroleum Corp. will acquire an 8.33 percent holding in the Kashagan project from KazMunaiGaz for about $5 billion, people with knowledge of the matter said June 28.
After KazMunaiGaz completes both deals it will hold a stake of 16.88 percent in the Kashagan project, one of the people said. Exxon Mobil Corp., Royal Dutch Shell Plc, Total SA and Eni SpA have 16.81 percent each. Japan’s Inpex Corp. owns 7.56 percent.
The initial development of Kashagan, due to start production in September, cost $48 billion, double early estimates.
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