Russian Prime Minister Vladimir Putin first hinted that a deal might have been struck at a meeting with Kazakh President Nursultan Nazarbayev last Thursday. In an interview with Kommersant, a source in Russia's Transneft, the operator of the Caspian Pipeline Consortium (CPC), confirmed that the deal had been completed, but did not disclose details.
Oman agreed to sell its stake in the project early this year, Kommersant said. The country had sent relevant offers to Russia and Kazakhstan. Hungary's MOL was also a potential bidder.
Russia agreed to buy the entire 7% stake for $700 million, the price offered for the asset by the Hungarians.
However, a Kommersant source close to the deal said the final price was around $350 million - half the starting price.
The deal has yet to be approved by the Kazakh government, which included the CPC in a list of strategic assets last summer.
The CPC, designed to carry Kazakh and Russian crude to a terminal on the Black Sea, was commissioned in October 2001. Its capacity currently stands at around 30 million metric tons of oil per year and is expected to double by 2012.
Mikhail Barkov, Transneft's vice president, said in late September he did not rule out the possibility that the international consortium could be forced to close down.
He said the agreements on privileged tariffs for the consortium were set to expire by the end of 2008, putting into question the system's further existence.
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