Soon after the blocking the USD5 billion deal for ONGC Videsh Ltd, Kazakhstan soon transferred a 8.4% shareholdings in the Kashagan oil field to China National Petroleum Corp. 

The agreement that transfers the stake in the oilfield was formalized yesterday at the visit of Chinese President Xi Jinping to Kazakhstan, according to industry insiderrs. Last year, OVL had entered a deal to purchase US giant ConocoPhillips 8.4% stake in the oil project located in the Caspian Sea. The partners had already approved the transaction, but in July, Kazakhstan had utiised its sovereign pre-emptive buy out right and purchased the 8.4% held by ConocoPhillips in the Kashagan oil field.

The stake was purchased by KazMunaiGaz, the oil and gas producer of Kazakhstan, as the state representative. The purchase price for the same price between OVL and ConocoPhillips, which amounted to USD5 billion. The deal allowed China to arrange a loan up to USD3 billion to finance the second phase of the development of the Kashagan oil field scheduled to begin after 2020.

KazMunaiGas also is a shareholder in the Kashagan consortium, together with Exxon Mobil, Royal Dutch Shell, Eni of Italy and Total of France.