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Kazakhstan Acquires Shares Of Huge Oil And Gas Field

Kazakhstan has worked out a deal to acquire 10 percent of the Karachaganak oil and gas field, the last major oil and gas field in Kazakhstan that did not have any Kazakh shareholders, RFE/RL's Kazakh Service reports.

Kazakh Oil and Gas Minister Sauat Mynbaev signed the agreement on December 14 with representatives of the Karachaganak Petroleum Operating (KPO) consortium. Under the deal Kazakhstan will receive a 5 percent stake in the project and will buy another 5 percent for some $1 billion.

Mynbaev said Kazakhstan will borrow the $1 billion from other consortium partners.

The KPO consortium is led by Britain's BG group and Italy's Eni -- each with 32.5 percent of the shares -- Chevron with 20 percent, and LUKoil with 15 percent.

Under the new agreement, which comes into force on June 30, BG and Eni will lower their shares to 29.25 percent, Chevron to 18 percent, and LUKoil to 13.5 percent with 10 percent going to KazMunaiGaz, the state-owned Kazakh energy company.

Plans for Karachaganak envisage that the filed will produce some 500,000 tons of oil in its initial phase, with that volume increasing to 2 million tons eventually. The field has an estimated 1.2 billion tons of oil.

Karachaganak also contains natural-gas reserves estimated to amount to some 1.35 trillion cubic meters.

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