China sabotages OVL-Conoco deal in Kazakhstan

Vol 16, PW 20 (02 May 13) People & Policy

History is repeating itself for OVL, this time in Kazakhstan where China National Petroleum Corporation (CNPC) is trying to steal its $5bn deal to buy an 8.4% stake from ConocoPhillips at Kashagan.

OVL signed an agreement with ConocoPhillips to buy the stake last November but unless the Kazakh government approves by May 25, the deal will lapse, leaving the field open for CNPC. The Chinese are leaving nothing to chance: President Xi Jinping is lobbying hard for the stake with his Kazakh counterpart Nursultan Nazarbayev.

Worried OVL notes how in sharp contrast the Indian government is doing nothing at a government level to push the deal through. “Manmohan Singh has not written a single letter to Kazakh authorities,” complains OVL, referring to the Indian prime minister.

“Nor has any cabinet minister.” Kazakh President Nazarbayev visited Beijing on April 5 (last month) and Chinese President Jinping is expected to visit Kazakhstan in June.

"Diplomatic channels must be opened to Kazakhstan," says OVL. "It is foolish for OVL officials to talk to Kazakh authorities.

This deal needs high level government to government talks. This is the first time we will lose a deal after signing an agreement with a seller company.

" Worse, India's Cabinet Committee on Economic Affairs headed by the PM has yet to approve the deal. OVL is also upset with India’s foreign minister Salman Khurshid who visited Kazakhstan's largest city Almaty on April 25 but not the capital Astana where the government sits.

Khurshid asked Kazakh foreign minister Erlan Idrissov to support the deal when he was in Delhi on March 6 but Idrissov was non-committal.

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