Kazakhastan blocked $5-bn bid to buy stake in oilfield: OVL

ONGC Videsh Ltd (OVL) on Wednesday said its USD 5-billion bid to buy a stake in  Kazakhastan's biggest oilfield has been blocked by the central Asian nation.

"Based on the communication  received through ConocoPhillips (COP), the government of Kazakhstan has announced that in accordance with the Republic of Kazakhstan (ROK) Law on Subsurface and Subsurface Use, ROK has exercised its priority right and  pre-empted the bid by ONGC Videsh to acquire the 8.4-percent stake of ConocoPhillips in the North Caspian Sea Production Sharing Agreement (NCS PSA)," the company said in a statement in New Delhi.

ONGC Videsh is a 100-percent owned subsidiary of ONGC. "It is understood that KazMunayGaz (KMG), the national oil company of Kazakhstan, shall be designated as the buyer, on behalf of the
state," it said.

OVL had finalised the definitive agreements in November 2012 for acquisition of 8.40-percent participating  interest (PI)  of ConocoPhillips in the NCS PSA. "The bid of ONGC Videsh was not pre-empted by the co-venturers of  the NCS PSA  within in the stipulated time period that ended in January 2013," the statement said.

The Kashagan field, located in the shallow waters (~5m to 8m) 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 percent PI, while ConocoPhillips has a PI of 8.40 percent and Inpex has 7.56 percent.