ConocoPhillips sold 5.4 percent of its assets in Kazakhstan to KazMunayGas, the national oil and gas company. The sale amount was USD5.4 billion, according to the announcement by ConocoPhillips, and the assets include the Kashgan offshore drilling site.

ConocoPhillips will allocate the proceeds from the sale for its internal goals, new investments, and further company development.

The Oil and Gas Ministry of Kazakhstan ap­proached ConocoPhillips with the offer to buy an 8.4-percent stake in the North Caspian Sea Production Sharing Agreement. The deal be­came possible based on Kazakhstan’s preemp­tive right under the subsoil resources and state law. KazMunayGas conducted the deal as the agent of the Kazakh government. The portion purchased from ConocoPhillips will later be sold to CNPC, a Chinese company.

Prior to the transaction, the North Caspian Operating Company (NCOC) consisted of the following investors: Agip Caspian Sea (16.81 percent), KMG Kashagan (16.81 percent), ConocoPhillips North Caspian (8.4 percent), ExxonMobil Kazakhstan Inc. (16.81 percent), Inpex North Caspian Sea (7.56 percent), Shell Kazakhstan Development (16.81 percent), and Total EP Kazakhstan (16.81 percent). NCOC stands as the operator of the project with es­timated recoverable oil deposits at 11 billion barrels. The entire field contains approximately 35 billion barrels.

While the Prudhoe Bay oilfield in Alaska is considered to contain the largest oil reserves in the world, Kashagan is thought to be the second largest.