ConocoPhillips had received notification from the Kazakhstan Ministry of Oil and Gas (MOG) in July 2013 that it was exercising the right under the Subsoil Law of Kazakhstan to assume the company’s proposed sale of its Kashagan interest to ONGC Videsh (OVL).
KMG was elected by the MOG as the purchasing entity.
ConocoPhillips commercial, business development and corporate planning executive vice president Don Wallette said the company has made significant progress on creating value for shareholders by divesting non-core assets, after becoming an independent E&P company in May 2012.
"We appreciate the cooperation of KazMunayGas in the successful completion of this transaction," Wallette added.
ConocoPhillips holds $117bn of total assets with operations and activities in 30 countries, while proved reserves of the company were 8.6 billion, as of 31 December, 2012.
In November 2012, ONGC signed an agreement with ConocoPhillips, to acquire Kashagan interest for a consideration of $5bn.
The North Caspian Sea production sharing agreement includes the Kashagan oil field, located in shallow water depths of five to eight metres in the Kazakh North Caspian Sea, and is considered the largest development project in the world.
From the first phase, ONCG will be entitled to annually receive 1.0MMT for 25 years, with a peak of 1.6MMT when the field becomes operational in the first half of 2013. ONGC’s share is also expected increase significantly when the subsequent two phases become operational.
Image: Relief location map of the Caspian Sea, where the Kashagan oil field is located. Photo courtesy of Uwe Dedering.