ConocoPhillips has announced its intention to sell its share in Kashagan, the North Caspian Sea Production Sharing Agreement.
The company has informed its partners in the venture and the Kazakhstan government and is likely to sell its 8.4% stake to India's Oil & Natural Gas Corporation (ONGC) Videsh Ltd. The company, is the international arm of the state-owned company.
Derricks in the Caspian Sea Image: Caravanistan.com |
Kashagan is located in the Kazakh sector of the Caspian Sea and ConocoPhillips' interest in project is currently valued at around $5.5bn billion. The deal is expected to be signed in the first half of 2013.
ConocoPhillips has made the decision to sell as part of its asset disposition program, which has already brought in some $2.1bn. The Kazakh sale will boost this total to around $7bn, bringing the US major close to its target of $8-$10bn by the end of 2013.
ONGC Videsh Ltd's recent steady decline in oil and gas production, along with its stalled coal production, may be reversed by the deal. India's rapidly growing economy is increasingly dependent on energy imports. However, the country still has a significant energy gap, evidenced by half the population being plunged into darkness during India's worst-ever blackout in July this year.