Eni waives pre-emption rights in favour of OVL

In a move that reduces the hurdle for ONGC Videsh’s $5 billion bid to acquire ConocoPhillips’ stake in Kashagan oilfield of Kazakhstan, one of the field operator
Eni has publicly stated that it will not pre-empt or block the acquisition.

Italy’s Eni is the operator of the first phase of the Kashagan oilfield that is due to start production in second quarter of 2013.

Once the other five operators in the project waive their pre-emption rights, the deal will go before Kazakhstan government, which contractually has 180 days to clear it.

Eni, ExxonMobil of US, Royal Dutch Shell, France’s Total and Kazakhstan’s Kazmunaigas (KMG) hold 16.81 per cent stake each in the field, while Japan’s Inpex the remaining 7.56 per cent. The partners have 60 days to decide on exercising their right of first refusal on ConocoPhillips’ stake.

OVL, which is the overseas arm of Oil & Natural Gas Corp earlier offered about $5 billion to acquire the 8.4 per cent stake of US energy giant ConocoPhillips in Kashagan, the biggest oilfield discovery in over four decades.

The deal is subject to the approval of governments of Kazakhstan and India and also to other partners in the Caspian Sea field waiving their right of first refusal.