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Kashagan Deal Inked

Kashagan Deal Inked published on

Xi Jinping’s visit to Kazakhstan has contributed to closing the deal on the Chinese participation in the Kashagan project (our previous articles on Kashagan here and here. On Saturday Reuters reported the deal and provided some details of the transaction. Kazakh sources like Tengrinews.kz and Newskaz also informed about the sale of the shares in Kashagan project to China National Petroleum Corp (CNPC) but without elaborating on the conditions. Astana TV today informed that details of the whole transaction would be announced later. According to Reuters KazMunayGas JSC (KMG) will resell ConocoPhilip’s shares for around 5 bln USD, amount, that is slightly lower than expected. CNPC however will pay up to $3 billion to cover half of Kazakhstan’s financing of the second phase of Kashagan’s development which was one of the additional costs to be paid by the Chinese buyer I wrote about in the previous articles. Another part of the deal is the agreement that would guarantee loans from The China Development Bank and The Export-Import Bank of China – worth respectively $3 billion and $5 billion – to Kazakhstan’s state holding firm Baiterek. Official version of the terms and conditions will be revealed later and transaction will be probably fnalized in October but as deal was supported and announced both by Xi Jinping and Nursultan Nazarbaev and other Kazakh officials it’s hardly possible that it would not be. It’s worth mentioning that the agreement on Kashagan is only a part of the whole set of projects worth 30 bln USD that were inked during Xi’s visit.