Kazakhstan Oil Field Deal Settled
An agreement between Kazakhstan and a consortium of companies – including BG Group and Eni – involved in the country's Karachaganak field became effective on Thursday after six months of wrangling over the details.
The deal – originally signed on Dec. 14 2011 – settles a dispute more than two years old between the consortium and the Kazakhstan government, with the partners now allowed to recover costs before the government takes its share of the hydrocarbon revenues.
It sees the entry of the Kazakh state company KazMunaiGaz, which gets a 10-percent stake issued pro rate by the current partners. Meanwhile KMG will provide a pipeline with the capacity to transport up to two millions tons of liquids a year.
"KazMunaiGaz's entrance represents a significant step forward towards strengthening the cooperation between the parties involved in the consortium. In the interim the companies have already started preparatory activities to support future development of the field, which is expected to yield a substantial increase in current production of liquids and gas," said a statement issued by Eni.
BG Group Chief Executive Sir Frank Chapman commented in a BG Group statement:
"We welcome the Republic of Kazakhstan and KMG into the Karachaganak contracting companies group and look forward to working with all of our partners to capture the significant remaining potential of the giant Karachaganak field."
Karachaganak is a giant liquid and gas field with recoverable reserves of five billion barrels of oil equivalent. In 2011, production at the Karachaganak field averaged 239,000 barrels per day of liquids and 784 million cubic feet of gas per day of natural gas.
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