Republic Kazakhstan involved in Karachaganak project

Companies in the giant Karachaganak gas condensate field in the North-Western Kazakhstan of the Republic of Kazakhstan (RoK) and the Contracting Parties have reached an agreement which will support the further development of the field.

To acquire the agreement Kazakhstan of KazMunaiGas (KMG) a 10% interest in the project.

This is done by each of the contracting companies 10% of their rights and interests in the Karachaganak final production sharing agreement (FPSA) CMM transferred to.

"BG Group looks forward to working with CMM as a partner in the project Karachaganak, one of the world's largest gas and condensate fields,", said Sir Frank Chapman, BG Group Chief Executive.

"This agreement represents an excellent result for the project partners as well as for the Government and the people of Kazakhstan".

Before tax, return under the agreement of the contracting companies Karachaganak is $3 billions of dollars. The main elements are:

The contracting companies receive cash payment before tax $1.5 billion of RoK in exchange for a 5% interest of CMM in the FPSA will take place.The contracting companies get an additional $1.5 billion before tax idea of 500 million$ and $1 billion non-cash payment, in exchange for a second 5% of the FPSA transferred to KMG. The non-cash consideration includes definitively and irrevocably settlement of costs and other related requirements and the allocation of one additional 2 million tons per year capacity for the Karachaganak project in the Caspian pipeline Consortium pipeline export.The contracting companies be responsible be paid back loans to the CMM in installments over a three year period for the payment of tax on the entire Kaufpreis.Die party to the agreement make $ 1 billion from $1 billion. The loan will be repaid from the proceeds of CMM share of oil and gas sales interest by Samruk Kazyna, a warranty of its 10% Kazakhstan of sovereign wealth funds secured.

"Karachaganak is estimated, hydrocarbons initially in place of 9 billion barrels of condensate and 48 trillion cubic feet gas - to date have produced less than 10% of this resource is" Ashley Almanza, BG Group Executive Vice President said.

"Today's agreement ensures strong alignment with the Republic of Kazakhstan and forms the basis for the realization of the great remaining potential and the value in Karachaganak."

BG group interested in the project Karachaganak is set already strongly 29.25% of 32.5%.

BG Group remains common operator with ENI, which will hold also 29.25% (32.5% today).

Chevron holds 18% (20%); LUKOIL 13.5% (15%); and CMM 10%.

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