KazMunayGaz Studies Profitability from Purchase of Oman’s Share in CPC Project: Head of Company

Oil&Gas Materials 11 July 2008 19:10 (UTC +04:00)

Kazakhstan, Astana, 11 July / corr. Trend K.Konirova / KazMunayGaz Open Joint-Stock Oil Company clarifies financial profit from the purchase of eight-percent shares of Oman in the Caspian Pipeline Consortium (CPC) project, Serik Burkitbayev, the head of KazMunayGaz, told Trend in Astana on 11 July.

"There is always interest on strategic projects, such as the CPC. At present, we are preparing financial estimation on profitability of investment. Oman sells its shares at commercial prices. After the completion of estimation, we will figure out its profitability in the current situation and make our decision," Burkitbayev said.

Regarding the possibility of purchase of Oman's shares in the Pearl project in the Caspian Sea by KazMunayGaz, Burkitbayev said: "I think, it is a packet deal. We are interested and can buy these shares should the Government gives green light. We will estimate its economical profitability, as the shares are being purchased at commercial prices, which are too expensive."

Oman decided to leave the CPC considering this pipeline project as inefficient. However, Russia and Kazakhstan, the state shareholders of the CPC, have a privileged right to buy Oman's shares. Russia and Kazakhstan can divide Oman's share between each other equally.

The CPC pipeline system with the length of 1,510km, connects Tengiz field of Kazakhstan to marine terminal near in Novorossiysk in Russia.

The CPC's authorized capital is divided equally among founder countries and private oil companies. Share distribution among founder countries is as follows: Russia - 24%, Kazakhstan - 19%, Oman Sultanate - 7%.

Private oil companies, which participate in the consortium are Chevron Caspian Pipeline Consortium (15%), LUKARCO B.V. (12.5% each), Rosneft-Shell Caspian Ventures Limited, Mobil Caspian Pipeline (7.5% each), Agip International (N.A.) N.V., BG Overseas Holdings Limited (2% each), Kazakhstan Pipeline Ventures Open Ltd. And Oryx Caspian Pipeline Open Ltd. (1.75% each).

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