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India finally gets 25% in Kazakh field
ASTANA (KAZAKHSTAN): "We are sure of making a spectacular breakthrough (in oil sector) this time,'' petroleum secretary R S Pandey last week wrote
in the visitor's book at the Indian ambassador's residence in the Kazakh Capital. True to his words, the two countries will sign documents on Saturday to give India its first kill in the Great Game for Central Asia's hydrocarbons treasure.
After three years of exasperating negotiations, Kazakh national oil firm Kazmunaigaz will assign a 25% stake in the medium-size Caspian concession of Satpayev to ONGC-Mittal Energy Ltd, steel tycoon Laxmi Mittal's joint venture with state-owned explorer ONGC. The offer had first been formalised at talks PM Manmohan Singh had with Kazakhstan president Nursultan Nazarbayev in 2005 on the sidelines of a regional meeting in Moscow.
As a sweetener, HPCL-Mittal Energy Ltd and Bharat Petroleum will ink MoUs that could lead to business worth $20-25 million for KazStroyService. The Kazakh engineering firm will build sulphur units for refineries, particularly the Bhatinda plant being put up by Mittal's venture with Hindustan Petroleum.
The Satpayev deal will move Indo-Kazakh ties out of the shadow of the failed Kurmangazy oilfield deal. The groundwork for the breakthrough was laid by former oil minister Mani Shankar Aiyar during his February 2005 visit to Astana. At that meeting, his then Kazakh counterpart Vladimir Shkolnik told Aiyar: "...Make an offer that we cannot refuse...our President wants to give India a role in development of oilfields.''
While the equity offer is sealed, several terms of endearment still remain undecided, which could stall future progress. After several hiccups, talks in Astana had got bogged down on Wednesday over commercial issues such as payments of signing amount, bonus during exploration and future partnership structure. The breakthrough came late on Thursday night during final negotiations in Delhi. Though legal issues seem to have been resolved, the financial aspects will still have to be worked out between the two firms.
Access to Caspian oil is vital to ensure the country's long-term energy security as it reduces dependence on West Asia. Several existing and proposed pipelines such as Blue Stream and the Kazakh-Chinese pipelines are there for India to bringing Central Asian oil within its reach. Blue Stream can bring Caspian oil to the Mediterranian from where it will come into the Gulf through the Israeli Eilat-Ashkelon pipeline or a new link Egypt is planning to bridge the two seas. In case of the Chinese pipeline, India can either haul the Caspian oil through a Chinese port or go for an oil-for-gas barter.
The Caspian region is estimated to have proven oil reserves between 17 and 33 billion barrels, which is comparable to OPEC member Qatar on the low end and the US on the high end. In 2003, regional oil production reached roughly 1.5-1.7 million barrels per day, comparable to annual production from South America's second largest oil producer, Brazil. By 2010, analysts expect the countries of the Caspian region to produce between 2.4 and 5.9 million barrels per day, which would exceed annual production from South America's largest oil producer, Venezuela.
India finally gets 25% in Kazakh field-International Business-Business-The Times of India
ASTANA (KAZAKHSTAN): "We are sure of making a spectacular breakthrough (in oil sector) this time,'' petroleum secretary R S Pandey last week wrote
in the visitor's book at the Indian ambassador's residence in the Kazakh Capital. True to his words, the two countries will sign documents on Saturday to give India its first kill in the Great Game for Central Asia's hydrocarbons treasure.
After three years of exasperating negotiations, Kazakh national oil firm Kazmunaigaz will assign a 25% stake in the medium-size Caspian concession of Satpayev to ONGC-Mittal Energy Ltd, steel tycoon Laxmi Mittal's joint venture with state-owned explorer ONGC. The offer had first been formalised at talks PM Manmohan Singh had with Kazakhstan president Nursultan Nazarbayev in 2005 on the sidelines of a regional meeting in Moscow.
As a sweetener, HPCL-Mittal Energy Ltd and Bharat Petroleum will ink MoUs that could lead to business worth $20-25 million for KazStroyService. The Kazakh engineering firm will build sulphur units for refineries, particularly the Bhatinda plant being put up by Mittal's venture with Hindustan Petroleum.
The Satpayev deal will move Indo-Kazakh ties out of the shadow of the failed Kurmangazy oilfield deal. The groundwork for the breakthrough was laid by former oil minister Mani Shankar Aiyar during his February 2005 visit to Astana. At that meeting, his then Kazakh counterpart Vladimir Shkolnik told Aiyar: "...Make an offer that we cannot refuse...our President wants to give India a role in development of oilfields.''
While the equity offer is sealed, several terms of endearment still remain undecided, which could stall future progress. After several hiccups, talks in Astana had got bogged down on Wednesday over commercial issues such as payments of signing amount, bonus during exploration and future partnership structure. The breakthrough came late on Thursday night during final negotiations in Delhi. Though legal issues seem to have been resolved, the financial aspects will still have to be worked out between the two firms.
Access to Caspian oil is vital to ensure the country's long-term energy security as it reduces dependence on West Asia. Several existing and proposed pipelines such as Blue Stream and the Kazakh-Chinese pipelines are there for India to bringing Central Asian oil within its reach. Blue Stream can bring Caspian oil to the Mediterranian from where it will come into the Gulf through the Israeli Eilat-Ashkelon pipeline or a new link Egypt is planning to bridge the two seas. In case of the Chinese pipeline, India can either haul the Caspian oil through a Chinese port or go for an oil-for-gas barter.
The Caspian region is estimated to have proven oil reserves between 17 and 33 billion barrels, which is comparable to OPEC member Qatar on the low end and the US on the high end. In 2003, regional oil production reached roughly 1.5-1.7 million barrels per day, comparable to annual production from South America's second largest oil producer, Brazil. By 2010, analysts expect the countries of the Caspian region to produce between 2.4 and 5.9 million barrels per day, which would exceed annual production from South America's largest oil producer, Venezuela.
India finally gets 25% in Kazakh field-International Business-Business-The Times of India
