JSC KazMunaiGas Exploration Production (KMG EP) has reached an agreement with the JSC National Company KazMunayGas (NC KMG) to acquire four hydrocarbon exploration contracts. As per the agreement, KMG EP acquires the following four contracts: Temir, Teresken, Karaton-Sarkamys and the territory adjacent to Uzen and Karamandybas. The acquisition cost of the four contracts is $40 million. According to the company’s estimates, the geological resources on four blocks are around 1.5 billion barrels of oil equivalent.
Temir and Teresken blocks are located in the Aktobe region in close proximity to the assets of Kazakhoil Aktobe LLP and Kazakhturkmunai LLP, as well as other assets, which may be of interest to KMG EP. The geographic location of the contract area has several advantages, including infrastructure and logistics. The territory adjacent to Uzen and Karamandybas is located in the area of operations of Uzenmunaigas production facility. Block Karaton-Sarkamys is located in the Atyrau region 100 km south-west of the Kulsary deposit in the area of operations of Embamunaigas production facility.
The terms of the contracts on the territory adjacent to Uzen and Karamandybas, Karaton-Sarkamys block and Temir, is 6 years from 2010, with the right of extension until 2019. With regard to the Teresken block, the license is for 6 years, starting in 2006, with the right of extension until 2015. Significant synergies can be achieved through the use of the existing infrastructure of Embamunaigas and Uzenmunaigas production facilities in Atyrau and Mangistau regions, which will help to optimize capital and operating costs.
KazMunaiGas E&P will continue to acquire onshore Kazak assets!
In March 2011, KMG EP signed an approximately ~$150 million deal to acquire 50% interest in Fedorovsky block in Kazakhstan. This is followed by the $40 million deal with NC KMG. In line with their strategy of acquiring selective onshore assets in Kazakhstan, KMG EP is open for additional acquisitions.
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