ConocoPhillips, Abu Dhabi win Kazakh oil rights
October 6th, 2008 - Posted in energy investmentThe Associated Press
DUBAI, United Arab Emirates: Abu Dhabi’s Mubadala Development Co. and U.S. oil giant ConocoPhillips said Sunday they have signed a deal with Kazakhstan’s national oil company to drill in a potentially lucrative oil and gas region in the Caspian Sea.
The memorandum of understanding with Kazakhstan’s KazMunayGas tentatively gives Houston-based ConocoPhillips and Mubadala, one of the Gulf’s most active government investment vehicles, the right to 49 percent of the hydrocarbons in a 8,100 square kilometer (3,130 square mile) zone near the Kazakh city of Aktau.
No financial terms were released.
ConocoPhillips and Mubadala would split their share of the project equally. KazMunayGas would remain the majority partner at the site.
The companies have until Dec. 31 to negotiate the final terms of the deal.
“KazMunayGas looks forward to a speedy conclusion to the negotiation and a successful, long-term relationship with both ConocoPhillips and Mubadala,” KazMunayGas President Kairgeldy Kabyldin said in a statement. The companies’ involvement will bring new exploration technology to the region, he added.
ConocoPhillips and Mubadala, in the same statement, both expressed optimism about the site’s potential. The companies said the location is “considered highly prospective for both oil and gas.”
The Caspian — which is also surrounded by Iran, Russia, Azerbaijan and Turkmenistan — is a politically sensitive region that is believed to hold some of the world’s largest remaining reserves of oil and natural gas.
Janet Groethe, a ConocoPhillips spokeswoman, declined to comment on what details remained to be resolved or whether the company was considering other investments in the region.
The U.S. company has minority stakes in a number of offshore Kazakh drilling blocks and in the Baku-Tbilisi-Ceyhan pipeline, which carries oil from the Caspian to the Mediterranean.
A Mubadala spokeswoman said executives were flying back from the Kazakh capital Astana, where Kazakh state media reported the deal was signed, and were unavailable for comment.
In July, Sheik Khalifa bin Zayed al-Nahyan, the president of the United Arab Emirates and ruler of its capital, Abu Dhabi, traveled to Kazakhstan to explore additional investment opportunities in the former Soviet state.
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Associated Press Writer Jamie Stengle contributed to this report from Dallas, Texas.
