ConocoPhillips intends to sell its 8.4% interest in the North Caspian Sea Production Sharing Agreement (Kashagan) to ONGC Videsh Limited.
Subject to various government approvals, Kazakhstan state preemption rights and co-venturers’ preemption rights, ONGC Videsh Limited, the international arm of Oil and Natural Gas Corporation Limited, India, would acquire ConocoPhillips’ interest in Kashagan, which is located in the Kazakh sector of the Caspian Sea. The transaction is expected to close in the first half of 2013. Expected proceeds are approximately US$5bn, which represents the purchase price plus expected working capital and customary adjustments at closing.
The proposed sale of its Kashagan interest is part of ConocoPhillips’ plan to increase value for shareholders through focused capital investments and a commitment to deliver growth in production and cash margins, improved returns on capital, and sector-leading shareholder distributions.
Kashagan is an offshore oil field located in the northern part of the Caspian Sea, in Kazakhstan. It holds some 35 bn bbl of oil in place and reserves of over 11 bn bbl beneath the Kazakhstan section of the north Caspian Sea. Shareholders are KazMunaiGas, Eni, ExxonMobil, Shell and Total with 16.81% each, ConocoPhillips with 8.40% and INPEX with 7.56%.