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Shell's BG acquisition places giant gas field at risk

Shell's acquisition of British BG could end up costing the company the rights to an enormous gas field in Kazakhstan.

Photo: Petr David Josek/AP/POLFOTO/arkiv

One of British BG's biggest cash cows could disappear in an instant, as Shell's acquisition bid on BG could open up for a new bidding war on the rights to the major Karachaganak gas field in Kazakhstan. The field has till now represented a key source of value creation for BG - gas from the field has accounted for 15 percent of the company's gas output and nine percent of BG's profits, according to the Wall Street Journal.

In the contract with BG, authorities i Kazakhstan included a clause stating that rights to the field could be subject to renegotiation if BG gets news owners. In this case, Kazakhstan has the right to buy BG out of the giant gas field. Whether the Central Asian country plans to exercise this option remains unknown, but the newspaper reports that Shell CEO Ben Van Beurden traveled to Kazakhstan last month for a series of meetings.

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