BG Group sells 10pc stake in gas field to Kazakhstan’s government for $3bn

BRITISH oil company BG Group said yesterday the Kazakhstan government has agreed to acquire a 10 per cent interest in its Karachaganak gas-condensate field for $3bn (£1.9bn).

Under the terms of the agreement with the Kazakh government, each of the contracting companies, including Italy’s ENI, will transfer 10 per cent of their stake in the field to state owned oil and gas company KazMunaiGas.

BG’s interest in the Karachaganak project will reduce from 32.5 per cent to 29.25 per cent when the agreement becomes effective on 30 June next year.

A more assertive Kazakhstan, home to more than three per cent of the world’s recoverable oil reserves and the largest economy in Central Asia, has sought in recent years to revise deals struck with foreign energy companies in the lean post-Soviet years.

Kazakhstan is comfortably the second-largest oil producer in the former Soviet Union after Russia, which has also moved in recent years to exert greater management control and secure bigger revenues from foreign-owned oil and gas developments.

The Karachaganak deal follows Kazakhstan’s entry into the Kashagan oilfield in the Caspian Sea, the world’s biggest oil discovery since the 1960s.

After entering the Kashagan field in 2005, the state later doubled its stake to 16.8 per cent.