Kazakhstan, Astana, June 29 / Trend D.Mukhtarov /
Kazakhstan has finished the acquisition of a 10 percent stake in the Karachaganak Petroleum Operating (KPO) consortium, the head of PR department of the Moscow branch of Lukoil Overseas Service BV, Grigory Volchek, said on Friday.
KPO develops in the West Kazakhstan region Karachaganak gas condensate field, which is one of the largest in the world.
"Yesterday a deal was completed on acquisition by Kazakhstan of a 10 percent stake in the Karachaganak project. Thus, a consensus was reached on such a complex dispute between the contractors and the state," Volchek said, speaking at a seminar "Oil and gas industry in Kazakhstan: Recent Trends and Prospects", organized by the Kazakh branch of Lukoil Overseas Service BV.
Earlier Chevron distributed statement said that Settlement Agreement signed on December 14, 2011 between the participating companies of Karachaganak project and the Republic of Kazakhstan was carried out and completed. As a result a 10 percent stake in the project was transferred Kazakhstan.
As a result of the agreement stake in the Karachaganak consortium are distributed as follows: BG Group (29.25 percent), ENI (29.25 percent), Chevron (18 percent), Lukoil (13.5 percent ) and the Republic of Kazakhstan (10 percent).
Karachaganak consortium (Karachaganak Petroleum Operating, KPO) and the Kazakh Oil and Gas Ministry on December 14, 2011 signed an agreement on Astana joining the Karachaganak project.
Kazakhstan for the first time expressed the desire to get a share in the project in 2009. This was preceded by a dispute with shareholders who disputed in the court duties imputed on them on the export of oil. The Kazakh government also filed Karachaganak Petroleum Operating
(KPO) consortium claims of compliance with environmental regulations and assessed additional taxes for 2005-2008 at $ 1.2 billion.
In 2010, Kazakh authorities accused the consortium of excess oil production. The Financial Police instituted criminal proceedings against company executives, but then it was closed. Later claims were withdrawn and the parties sat down to talks.
As a result, the Karachaganak consortium agreed to transfer to Kazakhstan a 5 percent stake in the expense of resolving differences over the period up to December 31, 2009, and also to sell at market price ($ 1 billion excluding taxes) an additional five percent stake in the project. Thus, Kazakhstan's share in the project is 10 percent.
The parties also agreed to apply the mechanism to control costs, which will allow the Kazakh side to increase the amount of control over the costs that arise during the implementation of major investment projects in the field. In addition, Kazakhstan has confirmed the stability of the contract with KPO.
For five per cent stake in the project to develop Karachaganak gas condensate field Kazakhstan draws from partners in the Karachaganak Petroleum Operating BV (KPO) consortium a three-year loan of $1 billion at a rate of LIBOR +3 percent. It is planned that KazMunaiGAs will serve and repay the loan at the expense of those cash flows to be generated by a 10-percent stake in the project.
Karachaganak with reserves of 1.2 billion tons of oil and condensate and over 1.35 trillion cubic meters of gas is one of the largest oil and gas condensate fields in the world. Karachaganak produces about 49 percent of all gas and 18 percent of all oil in Kazakhstan.