China’s CNPC has signed a deal with Kazakhstan’s Kazmunaigaz (KMG) to purchase an 8.33 percent stake worth $5 billion in the Kashagan oil and gas field on the Caspian shelf, the head of KMG said Saturday, September 7, according to RIA Novosti.

“After completing all the procedures, the Chinese side has become an 8.33 percent shareholder,” KMG’s head Sauat Mynbayev said after a signing ceremony. “The value of the deal is around $5 billion, but in addition to the sales price there are a range of conditions, namely the Chinese will finance a share in KMG for second-phase investment. Let’s say, the first part of the second phase – this is around $3 billion only on the part of KMG, the total amount is around six times more,” he added.

“KMG now has a 16.8 percent share in Kashagan,” he said. “This is half the investment KMG is obliged to finance in accordance with its share obligations. In addition, a pipe works will be built, as well as an industrial complex for oil equipment in Aktau, and some social facilities in Astana,” Mynbaev added.

The Kashagan field is one of the largest fields in the world opened in the last 30 years with geological oil reserves of 4.8 billion tons, with 38 billion barrels of oil (10 billion recoverable), and over a trillion cubic meters of natural gas.

The Kashagan project is operated by the North Caspian Operating Company, whose shareholders are Eni, KMG Kashagan BV (a daughter company of KMG), Total, ExxonMobil, Royal Dutch Shell with 16.81 percent each and Inpex with 7.56 percent. ConocoPhilips previously held 8.4 percent.

Kazakhstan’s oil and gas ministry notified American oil giant ConocoPhilips in July of its intention to use its preferential rights to buy ConocoPhilips’ share in the North Caspian project.