Lukoil Overseas Meets Requirements of IFC Loan Agreement
Under the terms and conditions of the Loan Agreement between the International Finance Corporation (IFC) and LUKOIL Overseas the latter has fulfilled all the required conditions and the IFC has declared the Project Completion Date.
The Loan Agreement for $150 million was signed on October 30, 2002. The loan was extended to LUKOIL Overseas Karachaganak B.V., a subsidiary of LUKOIL Overseas, to finance the development of the giant Karachaganak oil, gas and condensate field in northwestern Kazakhstan. The company holds a 15% interest in the consortiuKarachaganak Petroleum Operating.
The facility consists of three long-term loans with an amortization period of 9 years. During the investment phase of the Karachaganak project the loan was guaranteed by LUKOIL's funds. After completion of field development the loan will be repaid out of the cash flow earned through the sale of products, oil, gas and gas condensate.
The Project Completion Date is an important milestone in project financing, upon which normally any recourse including parent company guarantees (in this case LUKOIL's) is withdrawn.
Oktay Movsumov, Vice-President of LUKOL Overseas, said in connection with the event: "Achievement of this milestone signifies the new reduced risk profile of the Karachaganak project and demonstrates LUKOIL's achievements in non-recourse type of financing arrangements."
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