KMG EP shareholders appraise joint venture with Britain's BG Group
Kazakhstan, Astana, Sept. 16 / Trend S.Suleymanov /
The creation of a joint venture with Great Britain's BG Group has been positively evaluated in the market by the shareholders of the JSC KazMunaiGas Exploration Production (KMG EP), KMG EP Chief Executive Officer Kenzhebek Ibrashev said.
"The market, including our shareholders, received this deal well, especially in light of our plans to enter the Caspian shelf," Ibrashev said, commenting on the goals and objectives of the transaction.
On Aug. 31, KMG EP and BG Group announced the signing of an agreement to farm-in into a BG Group-operated license in the Central North Sea, the production license (P1722) which contains the White Bear prospect. KMG EP is acquiring a 35% interest in the licence.
"It is crucial to our development plans in the medium and long term, both in Kazakhstan and in the international arena. KMG technicians will be assigned to the operating structure of the project for participation in exploration on the shelf," Ibrashev said.
He said the number of involved experts will be greatly increased at the development stage.
"In addition to gaining experience and technology, of course, we are interested in the maximum profitability of our investments. Participation in this project corresponds to the internal criteria of profitability and investment attraction, in which, in particular in this project, our financial exposure is limited to fairly small amount," Ibrashev said.
The White Bear prospect, within the P1722 license, is located close to the BG Group's existing Everest and Armada producing assets. BG will retain the remaining interests and will continue to operate the license on behalf of the partners. The license carries an outstanding commitment to drill one further exploration well and the partners plan to drill this well in 2011.
KMG EP is among the top three Kazakh oil and gas producers. The overall production in 2009 was 11.5mmt (an average of 232,000 bpd) of crude oil, including the Company's share in Kazgermunai and CCEL. The total volume of proved and probable reserves, as at the end of 2009 was 234mt (1.7bn bbl), including shares in the associates - about 2.2 bn barrels. The Company's shares are listed on the Kazakhstan Stock Exchange and the GDRs are listed on The London Stock Exchange. The Company raised over $2bn in its IPO in September 2006.
NC KMG is a national operator of hydrocarbon exploration, production, refining and transportation, which represents the state interests in oil and gas sector of Kazakhstan. NC KMG owns approximately 63% stake in KMG EP, while 100% of NC KMG belongs to JSC National Welfare Fund Samruk-Kazyna.
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