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ONGC Videsh Ltd (OVL), the overseas arm of India's state oil and gas company ONGC, is planning to raise $3bn from international lenders to finance its planned acquisition of a stake in Kazakhstan's Kashagan oilfield. The Indian company is waiting for a decision from Astana on whether its purchase of ConocoPhillips' 8.4% stake in Kashagan will be approved.

OVL managing director Dinesh Sarraf said May 28 that the company could obtain loan from ONGC of at least $1.5bn and possibly as high as $2bn. The remaining $3bn it needs for the $5bn deal will be raised from international lenders, Sarraf said, the Economic Times reported.

Sarraf added that after raising $800m to finance a deal in Azerbaijan, "we are confident of raising funds for Kazakh acquisition."

However, it is not yet clear whether the deal will be allowed to go ahead. Although OVL agreed with ConocoPhillips in 2012 to buy the 8.4% stake, the Kazakh government still has the right to block the deal.

Kazakhstani officials have indicated that there is interest from rival bidders from China, and there are growing signs that Astana will favour a Chinese acquisition of the stake. Although Kashagan shareholders blocked the sale of BG Group's stake to China's CNOOC and Sinopec in 2003, since then China has become increasingly involved in Kazakhstan's oil and gas sector.

In addition, the pipeline infrastructure to export oil from west Kazakhstan to China is already in place, while it is not clear how oil would be exported from Kashagan to China, despite a proposal from New Delhi to build pipeline via Turkmenistan, Afghanistan and Pakistan. Kazakhstani officials say they cannot rule out a sale to CNPC and/or Sinopec.

A decision from the Kazakh government was expected on May 25, but three days before the deadline Oil and Gas Minister Sauat Mynbayev announced it would be postponed until July 2.