Kazakhstan's share in Karachaganak to yield about $5 bln in profit
Kazakhstan, Astana, March 5 / Trend, D. Mukhtarov /
Kazakhstan's 10-percent share in the Karachaganak oil project will bring additional profits amounting to $3.3 billion-$5 billion, Kazakh Oil and Gas Minister Sauat Mynbayev said on Monday.
"It will bring additional profits in the amount of $3.3 billion-$5 billion in cash flow for KazMunayGas, or $1.4 billion-$2 billion in discounted cash flow for KazMunayGas during 2012-2037 with a forecasted oil price at $85," Mynbayev said.
He said with current raw materials prices at $110 per barrel, the sum will be different.
In late 2011, Karachaganak Petroleum Operating and KazMunayGas reached an agreement to regulate disputable issues, according to which the contractor will give q 5-percent share in the project to the country.
The remaining 5 percent will be sold for $1 billion without taxes.
"The contractor, under the agreement, will receive a confirmation, abandonment of claims against the country and an additional quota in the CPC system. To fulfill the agreement the profit envisages expenditures worth $2 billion to pay 5-percent share. One billion
immediately will return to the country's budget in the form of taxes from sale of shares in the project," Mynbayev said.
He said the remaining $1 billion will be provided in the form of a loan of NC KMG, which through the Samruk Kazyna National Welfare Fund of Kazakhstan will be returned to the budget.
"Kazakhstan will not reimburse any costs incurred in excess of the agreed budget," the minister said.
Karachaganak field is oil and gas field of Kazakhstan, located in West Kazakhstan region, near the Aksai city. The field was opened in 1979.
Its commercial development began in mid-1980s by the Production Unit Orenburggazprom of the USSR Gas Industry Ministry.
Initially, the field in PSA terms is developed by international consortium consisting of British Gas and Eni (32.5 percent each), ChevronTexaco (20 percent) and Lukoil (15 percent). These companies joined the consortium "Karachaganak Petroleum Operating B.V." (KPO B.V.) to implement the Karachaganak project. In December 2011, an agreement was signed to sell 10-percent stake in the consortium of the Kazakhstan's National Oil Company "KazMunayGas" for $3 billion.
After the deal is concluded, it is expected that British Gas and ENI will preserve their 29.25-percent share, Chevron - 18 percent and Lukoil - 13.5 percent.
It is planned that KPO will operate the Karachaganak project until 2038.