ONGC Videsh Limited (OVL) will pick up stake in ConocoPhillips in the North Caspian Sea Production Sharing Agreement (NCS PSA) that includes the Kashagan Field, in Kazakhstan.
According to a statement issued here, OVL said that it has finalised definitive agreements for the acquisition of 8.40 per cent participating Interest (PI) of ConocoPhillips in the North Caspian Sea Production Sharing Agreement (NCS PSA).
The acquisition will mark ONGC Videsh’s entry into the largest oil proven North Caspian Sea of Kazakhstan.
The statement did not disclose the value of the deal. However, media reports said it was close to $5 billion. The acquisition, subject to relevant Government and regulatory approvals, priority rights and consortium pre-emption rights, is expected to close in the first half of 2013, the statement said.
The Kashagan Field, located in the shallow waters of the Kazakh North Caspian Sea, is the world’s largest current development project. Kashagan’s consortium partners are Eni, Total, Shell, ExxonMobil and KazMunaiGaz — each with 16.81 per cent participating interest, while ConocoPhillips has 8.40 per cent and Inpex a 7.56 per cent stake.
From Phase 1, the acquisition is likely to add an average annual production of about 1.0 mmt for over 25 years, with a peak of about 1.6 mmt. When Phases 2 and 3 are implemented, OVL’s share will be significantly higher.