LONDON - KazMunaiGas EP is ready and willing to join oil majors Exxon Mobil Corp. and Total SA in developing the giant Kashagan field should its parent company make available equity in the long-delayed project, its chief executive said Monday.
However no negotiations have yet taken place, Alik Aidarbayev told Dow Jones Newswires.
London-listed KMG EP has long been earmarked to take a share in Kashagan, which its parent, Kazakh state oil and gas company KazMunaiGas, joined in 2008 after the project's western partners agreed to reduce their holdings.
"KMG EP has cash free at hand, some of which we could use to channel towards exploration and production," said Aidarbayev. "At the same time, KMG EP has a shortfall of resources and it seems to be that investing in Kashagan would be a good use for it [this cash]."
Kazakhstan's president, Nursultan Nazarbayev, last month said that up to $4 billion from the country's National Oil Fund should be handed over to KMG, at least half of which the state-run firm is expected to use to pay its way at Kashagan.
KMG last year said it was considering transferring its 16.8% share in Kashagan to KMG EP, but Aidarbayev said Monday that the company would also be open to taking a smaller stake.
Kashagan is being developed by a consortium comprising Exxon, Total, U.K. major Royal Dutch Shell PLC, Italy's Eni SpA, ConocoPhillips and Japan's Inpex Corp.
The field, one of few in the world capable of producing more than one million barrels a day of oil, is expected to cost more than $135 billion to develop. First oil is expected at the end of this year or early in 2013.
KMG EP last month reported an 11% fall in net profit in 2011 after a strike at its oilfields in western Kazakhstan crimped crude output 7%. The company is also under pressure to increase its reserve base after it Monday only reported a reserve replacement ratio of 21%.
Aidarbayev said the company was prioritizing increasing output, both through acquisitions of fresh producing assets and better management of its existing fields.
However, KMG EP isn't in discussions to develop its parent company's share of the BG Group PLC and Eni-led Karachaganak project, said Aidarbayev.
"The KMG position on Karachaganak is such that they say 'let us complete the deal to the end and then we can discuss other issues,'" said Aidarbayev.
Copyright (c) 2012 Dow Jones & Company, Inc.
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