Lukoil Acquires New Hydrocarbon Assets in Uzbekistan for $580 Million

LUKOIL Overseas has completed a transaction with ZAO MGNK-SoyuzNefteGaz to acquire 100% of SNG Holdings Ltd. group, one of which is SoyuzNefteGaz Vostok Limited, a signatory to the Production Sharing Agreement (PSA) on the South-Western Gissar and Ustyurt Region fields in the Republic of Uzbekistan.

The transaction amount came to approximately USD 580 million. The National Holding Company Uzbekneftegaz is the second signatory to the PSA as a state authorized body. The PSA was signed on January 23, 2007 for a 36-year period; it came into effect on April 23, 2007.

There are 7 fields in the contract area of the South-Western Gissar (Kashkadarinsky Region), i.e., the gas condensate fields Dzharkuduk-Yangi Kyzylcha, Gumbulak, Amanata, Pachkamar and Adamtash, the oil and gas condensate field Southern Kyzylbayrak, and the oil field Koshkuduk. Southern Kyzylbayrak and Koshkuduk produce a small amount of oil and gas condensate.

The State Committee for Reserves of the Republic of Uzbekistan approved the oil- and gas-in-place (reserves of the C1 category by the Russian classification) of the field group in the amount of 100 billion cubic meters of gas and about 6 million tons of liquid hydrocarbons (oil and gas condensate). Thus, the cost of acquiring the C1 category reserves slightly exceeded USD 0.9 per barrel of oil equivalent. The design output in the contract territory is about 3 billion cubic meters of gas and over 300 thousand tons of liquid hydrocarbons per annum. This level is expected to be attained in 4 years.


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