Kazakhstan can sell up to 25% of shares in Tengizchevroil for up to $2.5 bln

/Almaty office of REUTERS, Michael Collet-White, Aug.19, 99/ - Kazakhstan intends to sell part or all of its 25 percent block of shares in the biggest oil project in Kazakhstan - Tengizchevroil joint-venture; price of the block may reach $2.5 billion, said anonymous source from oil industry to Reuters today."Of course, such intentions exist. Whether part or whole the block of shares", he said. Tengizchevroil joint-venture, created by Kazakhstan and Chevron who owns 45 percent of shares, produces 8 million tons of oil a year or third of all hydrocarbons produced by Kazakhstan. The company plans to produce 9.4 million tons of oil in 1999. Two years ago Kazakhstan sold 25 percent of its block of shares to Mobil. Another 5 percent of shares belong to LUKARKO, created by Russian LUKOIL and American Arco. "Now these stocks are more expensive, than they were two years ago when part of them was sold to Mobil. They could cost up to $2.5 billion", said the source. He says that share prices will at least double when Caspian Pipeline Consortium (CPC), which passes through Tengiz oil site to a port in Novorosiisk, will be put into operation in 2001. Besides, Tengizchevroil joint-venture intends to increase oil production up to 17 million tons in near future. "Taking into account all these, it is the right time to sell shares", said the source. Kazakhstan, which still in economic crisis after a significant decrease of incomes from traditional export products - oil and metalls, seeks ways of increasing the revenues of the state budget. The government, which reviewed the budget twice in 1999, stated the possibility of selling its shares in major oil companies.