Italian oil company Eni SpA. wants to buy natural gas company BG Group Plc's 17% stake in a consortium developing Kazakhstan's Kashagan oil and gas field in the Caspian Sea.

Kazakhstan's government has told BG that the government would use the right of first refusal to buy BG's 17% stake in the consortium, blocking an option held by Chinese companies Sinopec and China National Offshore Oil Co. to buy the stake.

However, an Eni spokesman has been quoted as saying that Eni will use its own right of first refusal to buy out the stake from the Kazakh government, adding that Kazakhstan's government has already expressed an interest in selling the stake to Eni.

The project to develop the Kashagan field is estimated to cost $20 billion. Kashagan is Kazakhstan's largest offshore oil and gas field, with oil reserves estimated at 4.8 billion metric tons, or 35.1 Bbbl.

Besides BG and Eni, the members of the international consortium for Kashagan's development are ExxonMobil Corp., Japan's Inpex BG, France's Total S.A., Shell, and ConocoPhilips.

6/29/2004