Russia's Lukoil sells Kazakhstan stake to China's energy giant

MOSCOW (AFP) - Russia's largest private oil firm Lukoil has sold some of its Kazakhstan stakes to China's energy giant Sinopec for US$1.09 billion (S$1.5 billion), the company said Thursday.

Lukoil has offloaded its 50 per cent share in Caspian Investments Resources, which participates in five fields in the Central Asian nation, the statement said.

Lukoil remains the largest Russian player in Kazakhstan despite the sale with its involvement in the Tengiz, Karachaganak and Kumkol fields.

The deal with the Chinese giant has been dragging on after the two sides initially inked an US$1.2 billion sale and purchase agreement last year.

Lukoil in February went to an arbitration court in February after Sinopec refused to finalise the deal.

Energy-rich former Soviet Kazakhstan is viewed by Moscow as remaining in its sphere of influence and is a part of a Russian-backed customs union.

The Central Asian nation is home to one of the world's largest offshore oil fields, the Kashagan field.

Energy companies Total, Eni, ExxonMobil, Shell and Kazakh state champion KazMunaigas, as well as Japanese firm Inpex and China's CNPC, are involved in the Kashagan field project.

Kazakhstan has said that work at the field is ahead of schedule and that production could begin in December 2016 after development was suspended by gas leaks.