History
Interest in the Caspian Sea first began in 1992 when an exploration program was announced by the Kazakhstan government. They sought the interest of over 30 companies to partake in the exploration. In 1993 the Kazakhstancaspiishelf was formed which consisted of Eni, BG Group, BP/Statoil, Mobil, Royal Dutch Shell and Total S.A., along with the Kazakh government. This consortium lasted 4 years until 1997 when the seismic exploration of the Caspian Sea was undertaken.
Upon completion of an initial 2D seismic survey in 1997, the company became the Offshore Kazakhstan International Operating Company (OKIOC). In 1998 Phillips Petroleum Company and Inpex bought into the consortium. Kashgan was discovered in 2000.
The consortium changed when it was decided that one company was to operate the field instead of the joint operatorship as agreed before. Eni was named the new operator in 2001. In 2001 BP/Statoil sold their stake in the project to the remaining partners. With Eni as operator, the project was renamed Agip Kazakhstan North Caspian Operating Company NV (Agip KCO).
In 2003, BG Group attempted to sell their stake in the project to two Chinese companies CNOOC and Sinopec. However, the deal did not go through due to the partners exercising their pre-emption privileges. Eventually, in 2004 the Kazakhstan Government bought half of BG's stake in the contract with the other half shared out among the five Western partners in the consortium that had exercised their pre-emption rights. The sale was worth approximately $1.2 billion. The Kazakhstan's take was transferred to the state-owned oil company KazMunayGas. On 27 September 2007, Kazakhstan parliament approved the law enabling Kazakhstan government to alter or cancel contracts with foreign oil companies if their actions were threatening the national interests.
KazMunayGas further increased its stakes in January 2008, after its 6 partners and the Government of Kazakhstan agreed on a compensation for the probable 5-year delay that was taken in developing the field. Eni operated this project under the JV company name of AgipKCO (Agip Kazakhstan North Caspian Operating Company N.V.). Following the agreements reached on 31 October 2008 between the Kazakhstan authorities and co-venturers under the North Caspian PSA (NCPSA), operatorship of the NCPSA was formally transferred from AGIP KCO to the new North Caspian Operating Company BV (NCOC) on 23 January 2009.
In October 2008, Agip KCO handed a US$31 million letter of intent for FEED work on phase two to a joint venture of Aker Solutions, WorleyParsons and CB&I. WorleyParsons and Aker Solutions are engaged also in the phase one, carrying out engineering services, fabrication and hook-up.
In November 2012, ONGC Videsh agreed to buy ConocoPhillips' 8.4% stake. However, the stake buy remains subject to approval of governments of Kazakhstan and India and also to other partners in the Caspian Sea field waiving their pre-emption rights. The deal is already approved by Eni.
Read more about this topic: Kashagan Field
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