End of the line: the CPC terminal at Novorossiisk
Kazakhs confirm CPC move
Kazakhstan will buy BP's stake in a holding company that owns 1.75% of the Caspian Pipeline Consortium (CPC) for $250 million, a senior energy official said today.
BP is leaving the Chevron-led CPC, the key private oil pipeline for Kazakh oil, over the disagreement about its expansion terms approved earlier this week by all other consortium members.
BP's joint venture with Kazakh state oil and gas company KazMunaiGaz, Kazakhstan Pipeline Ventures, has a 1.75% stake, while its joint venture with Russia's Lukoil , LUKArco, holds a 12.5% stake in CPC.
"We have agreed to buy BP's stake in Kazakhstan Pipeline Ventures," KazMunaiGas boss Kairgeldy Kabyldin told Reuters. "It is 49.9% for $250 million and the deal is due to be signed today."
Kabyldin said KazMunaiGaz was not interested in LUKArco's CPC stake since it was reserved for Russian oil shipment. But LUKArco's other asset - a stake in Tengizchevroil, Kazakhstan's largest oil producer - was interesting, he said.
"We are, of course, interested in the upstream asset so we are in talks with Lukoil about splitting those assets and evaluating them separately," Kabyldin said.
Kazakhstan is also in talks with Russia, which last month bought Oman's 7% stake in CPC and said it could resell 3%.
"It will depend on whether we have enough funds," Kabyldin told Reuters when asked if that deal would go through.
Apart from Chevron, which holds 15% in CPC, BP and Lukoil, the group's private shareholders include Shell, ExxonMobil, Italy's Eni and Russia's largest oil producer, Rosneft .
State shareholders Russia and Kazakhstan own 31% and 19% respectively.
CPC has been shipping oil, mostly from Kazakhstan, since 2001. It pumps up to 750,000 barrels per day to Russia for re-export to the Mediterranean.