Almaty: The Kazakh government will exercise its right of first refusal and acquire the stake held by ConocoPhillips in the nation’s biggest oil field, squeezing out India’s Oil & Natural Gas Corp Ltd (ONGC).

The Kazakh oil and gas ministry has informed ConocoPhillips it will buy the US oil company’s 8.4% interest in the Caspian Sea oil project, the Astana-based ministry said on Tuesday in an e-mailed statement. State-owned KazMunaiGaz National Co. will carry out the purchase on behalf of the government.

“There is no official intimation available to us," said D.K. Sarraf, managing director of ONGC Videsh Ltd, the overseas arm of ONGC.

ConocoPhillips said in November it intended to sell its stake in Kashagan for about $5 billion to ONGC, India’s biggest energy explorer. Kazakh law allows the central Asian nation to exercise an option to step in and buy that stake in place of the Indian company.

China National Petroleum Corp. will acquire an 8.33% holding in the Kashagan project from KazMunaiGaz for about $5 billion, people with knowledge of the matter said on 28 June.

After KazMunaiGaz completes both deals it will hold a stake of 16.88% in the Kashagan project, one of the people said. Exxon Mobil Corp., Royal Dutch Shell Plc, Total SA and Eni SpA have 16.81% each. Japan’s Inpex Corp. owns 7.56%.

The initial development of Kashagan, due to start production in September, cost $48 billion, double early estimates. Bloomberg

Utpal Bhaskar of Mint contributed to this report

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