BG Group today announced that the Republic of Kazakhstan (RoK) and the contracting companies in the giant Karachaganak gas-condensate field in north-west Kazakhstan have reached an agreement that will support the further development of the field.
The agreement, effective from 30 June 2012 on satisfaction of conditions precedent, involves Kazakhstan’s KazMunaiGas (KMG) acquiring a 10% interest in the project. This will be done by each of the contracting companies transferring 10% of their rights and interest in the Karachaganak Final Production Sharing Agreement (FPSA) to KMG.
The pre-tax consideration under the agreement to the Karachaganak contracting companies is $3 billion dollars. The key elements are:
Sir Frank Chapman, BG Group Chief Executive , said: “ BG Group looks forward to working with KMG as a partner in the Karachaganak project, one of the world’s largest gas and condensate fields. This agreement represents an excellent outcome for the project partners as well as for the government and people of Kazakhstan ”.
Ashley Almanza, BG Group Executive Vice President , said: “ Karachaganak is estimated to have hydrocarbons initially in place of 9 billion barrels of condensate and 48 trillion cubic feet of gas – to date less than 10% of that resource has been produced. Today’s agreement ensures strong alignment with the Republic of Kazakhstan and provides the foundation for realising the vast remaining potential and value in Karachaganak ”.
From the effective date of 30 June 2012, BG Group’s interest in the Karachaganak project will reduce to 29.25% from the 32.5% previously held. The Group will remain joint operator with Eni, which will also hold 29.25% (currently 32.5%). Chevron will hold 18% (20%); LUKOIL 13.5% (15%); and KMG 10%.
The terms and conditions of the Final Production Sharing Agreement signed in 1997 for the development of the Karachaganak field are unchanged. In addition, the contracting companies and RoK have reached agreement on all tax affairs up to the end of 2009.
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LNG World News Staff, December 14, 2011