State-owned ONGC, which trumped a strong bid by arch-rival China National Petroleum Corp to bag ConocoPhillips' stake in Kazakhstan's giant Kashagan oilfield, has won project operator Eni's approval for its $5 billion acquisition.
In its biggest acquisition till date, ONGC Videsh Ltd, the overseas arm of Oil & Natural Gas Corp last month agreed to pay US energy giant ConocoPhillips about $5 billion for the 8.4 per cent stake in Kashagan, the biggest oilfield discovery in over four decades.
The deal is subject to the approval of governments of Kazakhstan and India and also to other partners in the Caspian Sea field waiving their right of first refusal.
Industry sources said Italy's Eni, the operator of the first phase of the Kashagan oilfield that is due to start production in second quarter of 2013, has publicly stated that it will not pre-empt or block the sale.
Eni, ExxonMobil of US, Royal Dutch Shell, France's Total and Kazakhstan's Kazmunaigas (KMG) hold 16.81 per cent stake each in the field, while Japan's Inpex the remaining 7.56 per cent.
Sources said the partners have 60 days to decide on exercising their right of first refusal on ConocoPhillips' stake.
Once all the other five companies in the project waive their pre-emption rights, the deal will go before Kazakhstan government, which contractually has 180 days to clear it.
Sources said on the previous two occasions when companies sold out of Kashagan, the other partners pre-empted.
Originally, Kashagan field had Eni, BG Group of UK, ExxonMobil, Shell, Total and Kazakh government with 14.28 per cent stake each. BP had 9.52 per cent and Norway's Statoil 4.76 per cent.
Inpex of Japan and ConocoPhillips entered the consortium in 1998, purchasing Kazakhstan's 14.28 per cent share.