Hurricane Enters Agreement for Caspian Pipeline
Hurricane Hydrocarbons Ltd. has entered into a major agreement related to the transportation of its oil production to export markets. Hurricane signed a Heads of Agreement with Amoco Production Company, a subsidiary of BP plc, relating to the acquisition of an interest in the Caspian Pipeline Consortium ("CPC") pipeline for a cash consideration of US$100 Million.
Upon completion of the acquisition, Hurricane would become a 49.9% joint venture partner of Kazakhoil, with equal management rights, in Kazakhstan Pipeline Ventures LLC ("KPV"), which owns a 1.75% interest in the CPC pipeline. Hurricane would also be entitled to the repayment of KPV loans to CPC of approximately US$90 Million.
Hurricane would also obtain preferential rights of access to the CPC pipeline for the transportation of 3 million tonnes per year (approximately 64,000 bpd) of oil at the CPC shareholders tariff.
The acquisition is subject to board approval by both Hurricane and BP plc, completion of due diligence, the CPC shareholders who have the right to acquire the interest not exercising such right and the compliance by the parties with certain provisions of the CPC shareholders' agreement.
Hurricane expects that the acquisition of the CPC interest will close in December 2001. Bernard Isautier, President and Chief Executive Officer of Hurricane, said that "This development is a significant strategic step towards the reduction of Hurricane's transportation costs and the achievement of the full exploration and production growth potential of the Turgai basin."