Kazakhstan Seeks $100B in O&G Investments

SINGAPORE (Dow Jones Newswires), Oct. 13, 2010

Kazakhstan is seeking up to $100 billion in investment in its oil and gas exploration and production sector over the next decade as the nation seeks to more than double crude exports and sustain rapid economic growth, Prime Minister Karim Massimov said on Wednesday.

"We are currently exporting 1.31 million barrels (of crude oil) a day and we aim to take it to 3 million barrels a day," by 2020, Massimov told Dow Jones Newswires in an interview in Singapore.

"KazMunaiGas (the national oil company of Kazakhstan) cannot do it alone. We are looking for partners for KMG's projects," he said.

Kazakhstan will Thursday sign a deal for a $400 million fund for investments in the Central Asian country with Hong Kong-based investors, including Cheung Kong, controlled by billionaire Li Ka-shing.

The Kazakh government will contribute $100 million to the fund while the rest will come from Hong Kong families, Massimov, 45, said.

The oil-rich country is also planning to list some of its mining and resources companies in Hong Kong, said Massimov, who is on a three-day visit to Singapore and Hong Kong. Kazakhstan is the world's top uranium producer, with 2009 output of 14,000 tons.

"We are looking at initial public offers of some of our mining and resources companies in Hong Kong. For Singapore (IPOs), we will start the negotiations," the prime minister said, without naming any companies or giving details about the amount of funds they sought to raise.

KazMunaiGas, the exploration and production unit of the state oil company, raised $2 billion in a London Stock Exchange and Kazakhstan Stock Exchange listing in 2006, according to information on its website.

Samruk-Kazyna, the state-owned holding and investment company, is considering IPOs of three subsidiaries including KazMunaiGas, the company's chief executive Kairat Kelimbetov said in June, according to report in the Silk Route Intelligencer, a local internet publication.

Samruk-Kazyna sees potential for IPOs by units of KazMunaiGas and by national railway operator Temir Zholy and the Development Bank of Kazakhstan, Kelimbetov said, according the report dated June 4.

Full development of its major oilfields could make Kazakhstan one of the world's top five oil producers in the next decade, according to the U.S. Energy Information Administration.

Kazakhstan's sector of the Caspian Sea is believed to hold several as-yet-unexploited major oil and natural gas deposits, as well as the giant Kashagan oil field, on which work is now underway.

Some of the world's biggest energy companies have already invested heavily in Kazakhstan.

Approval was expected soon on a proposed partnership between India's Oil & Natural Gas Corp. and KazMunaiGas at the Satpayev exploration block, Massimov said.

Chevron heads up the Tengizchevroil consortium developing the Tengiz field, which produced nearly 500,000 barrels a day in 2009, while Eni and BG lead a consortium developing the Karachaganak project, producing 11 million tons of oil equivalent annually.

The North Caspian Operating Company--a consortium which includes Eni, Total and Exxon Mobil among others--is developing the Kashagan oil field, where output is due to start in 2012.

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