Natural gas giant BG Group has, alongside the other contracting companies in the giant Karachaganak gas-condensate field in north-west Kazakhstan, completed an agreement with the Republic of Kazakhstan, over the acquistion of a 10 per cent interest in the Karachaganak Final Production Sharing Agreement (FPSA).
The Republic will pay a $2.0bn cash and $10bn non-cash consideration for the stake in the FPSA, including the final settlement of all cost recovery claims.
In addition, tax of $1.0bn is payable on the gain arising on the disposal. The Republic's interest in the FPSA will be managed by the national oil company, KazMunaiGas (KMG).
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The consideration also includes the allocation of an additional 2.0m tonnes per year capacity in the Caspian Pipeline Consortium export pipeline (CPC) over the remaining life of the FPSA. This additional capacity starts at 0.5m tonnes immediately and rises to 2.0m tonnes during CPC expansion, which is underway and expected to complete over the next three years.
Ashley Almanza, BG Group Executive Vice President, said: "With this agreement in place the partnership can now move forward with new field development plans which are expected to unlock enormous value for both the country and the contracting companies."
The firm added that the completion of the agreement also provides for exemption from export custom duties for the Karachaganak project until 2038, the remaining 26 years of the FPSA term and final agreement on all tax and customs matters up to the end of 2009.
As a result of the agreement, BG Group's interest in the Karachaganak project has been reduced to 29.25% from the 32.5% previously held. BG Group will remain joint operator with parter Eni.
Karachaganak is estimated to have hydrocarbons initially in place of 9.0bn barrels of condensate and 48trn cubic feet of gas.
The share price fell 0.52% to 1,249.50p by 09:25.
NR
-
December 2023 NS&I Premium Bond winners - check now to see what you’ve wonIf you hold money in NS&I Premium Bonds, you can check from today (2 December) to see if you have won in the December prize draw. Here’s how to check.
-
OpenAI – corporate drama unleashed
OpenAI, the firm behind ChatGPT, was in uproar as its boss was booted out, briefly snapped up by Microsoft and then brought back again.
