Kazakhstan pays $1 bn for 10% of Karachaganak oil and gas field project
14 Dec 2011
The Kazakhstan government yesterday said that it would acquire a 10-per cent stake in the Karachaganak oil and gas field project, for $1 billion, and ended the long-running disputes with its international consortium partners.
State oil and gas company KazMunaiGas will borrow $1 billion over three years from the consortium partners, at a rate of LIBOR plus 3 per cent, to pay for the stake and repay the money from the cash flow that its stake will generate.
Kazakhstan oil and gas minister Sauat Mynbayev told reporters that KazMunaiGas will pay $1 billion for a 5-per cent stake in the Karachaganak, and the state would get another 5 per cent in return for dropping $2.2 billion of court claims against the consortium.
The Karachaganak oil and gas field project consortium comprises of UK's BG Group Plc and Italy's Eni SpA as lead partners holding 32.5 per cent each, while US oil major Chevron holds 20 per cent and Russia's Lukoil 15 per cent.
The consortium partners will sell stakes on a pro-rata basis, which will see BG and Eni reduce their stakes to 29.25 per cent, Chevron to 18 per cent and Lukoil to 13.5 per cent.
The settlement of the two year-long dispute paves the way for the project to proceed with the third phase of development to boost oil production to about 335,000 barrels a day and gas production to 16 billion cubic meters a year.
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