Posted on 05/16/2003 6:38:51 PM PDT by maui_hawaii
LONDON - A group of western oil companies today blocked two Chinese rivals from taking a stake in a Kazakhstan project, one of the world's largest new oil and gas developments.
Confirmation of the move, widely reported over the past two weeks, denies energy-hungry China a key foothold in the global hydrocarbons industry by keeping the Chinese firms, CNOOC and Sinopec, from buying eight percent stakes that British partner BG agreed to sell to them.
"Five of six remaining partners in the Republic of Kazakhstan's North Caspian Sea Production Sharing Agreement (NCPSA) have exercised their pre-emptive rights in the sale," said a statement released by BG.
The NCPSA project, which includes the potentially vast Kashagan field, is a key one for the world's top oil companies, which are finding it increasingly difficult to find viable new reserves as traditional hunting grounds, such as the U.S. Gulf and North Sea, start to mature.
"We see the Kashagan project and that whole region as an exciting one for our exploration and production operations," said a spokeswoman for Royal Dutch/Shell, one of the partners.
Some analysts have said the decision to block Chinese entry could damage relationships between the oil firms and China.
Chinese officials have moved to allay these fears, saying they see it as a commercial matter, but one analyst said on Friday: "I still think some of the partners might live to regret this one, next time a nice China project comes up."
Earlier this year, Sinopec and CNOOC each agreed to buy 8.33 percent each from BG for $615 million apiece. BG is a relatively small partner for which the multibillion dollar development costs of the project were becoming prohibitive.
BG will still receive payment in full, but from the partners instead of from the original buyers.
Three of the world's top four oil companies, Exxon Mobil Corp, Royal Dutch/Shell and TotalFinaElf, will now hold 20.37 percent each along with project operator ENI, up from 16.7 percent previously.
ConocoPhillips will raise its stake from 8.33 percent to 10.19. Japan's Inpex decided not to exercise its pre-emption right, which automatically goes to the other partners. It keeps an 8.33 percent holding. World number two BP and Norway's Statoil sold their holdings to the other partners in 2001.
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