The Kazakh government exercised its right of first refusal (ROFR) or pre-emption rights to acquire the 8.4 per cent stake held by ConocoPhillips in Kashagan oilfield.
In November 2012, India’s ONGC decided to buy ConocoPhillips’ 8.4 per cent stake in Kazakhstan’s biggest oilfield, Kashagan for $5 billion.
But, according to a law in Kazakhstan, the national government has the ROFR that allowed it an option to buy the stake at the price agreed between ONGC and ConocoPhillips.
With the exercise of this right by the Kazakh government, ONGC could not acquire a stake in Kashagan, a Caspian Sea field which is set to produce 370,000 barrels of oil a day.
The field is to start output by September, eight years later than initially planned and with costs nearing $48 billion, double the early estimates, reports indicate.
The field is said to be the world’s largest oil find in five decades.
The Kazakh government may subsequently sell the stake to China National Petroleum Corp (CNPC) for a reported $5.3-5.4 billion.
While ONGC got nod of the partners for acquisition of ConocoPhillips stake at end of January, Kazakh government had time till July to approve the transaction.
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