Kazakhstan has invoked its preemptive right to acquire the shares in the massive Qashagan oil field that ConocoPhillips put up for sale.
Kazakhstan’s Oil Ministry announced that state company KazMunaiGaz (KMG) was taking the 8.4 percent stake ConocoPhillips had in the project.
KMG did not mention the price for the shares, but they were widely reported as being worth some $5 billion or more.
ConocoPhillips originally planned to sell its stake to India’s ONGC Videsh Ltd., but Kazakh authorities indicated earlier this year that they favored China as a new partner.
The Press Trust of India (PTI) at the start of May predicted China would receive the shares and blamed the Indian parliament and Prime Minister Manmohan Singh for not moving more quickly to secure the ConocoPhillips stake.
The PTI wrote the Indian government "unlike China, has not engaged with Kazakhstan at the highest levels to push the deal through."
Many reports say Kazakhstan will either sell all or half of the ConocoPhillips stake to China at a marked-up price.
The Kazakhstani website Halyk Finance, a subsidiary of the People's Bank of Kazakhstan, posted information on June 28 that "Kazakhstan is likely to use its preemptive right to buy ConocoPhillips' 8.4 percent share in Qashagan and sell it to China for U.S. $5.5 billion."
In late April, the British daily "Financial Times" cited KMG head Kyazzat Kiinov as saying Kazakhstan already has a 16.8 percent stake in Qashagan and calling that stake "sufficient."
The July 2 acquisition gives KMG slightly more than a 25 percent stake in Qashagan. Other shareholders are Italy's Agip, U.S. company ExxonMobil, the Anglo-Dutch company Shell, and France's Total, all with a 16.81 percent stake. Japanese-European-U.S. Inpex North Caspian Sea Ltd. owns the remaining 7.56 percent.
Qashagan, with some 35 billion barrels of oil, is due to start commercial production later this year.
The group of oil companies developing the Qashagan field has already spent 13 years and spent some $48 billion on the project.
Qashagan is the largest oil field discovered since the 1970s.
With reporting by Interfax and Trend.az