BG is satisfied with the deal on sale of its stake in North-Caspian project and intends to concentrate business in Karachaganak

/INTERFAX-KAZAKHSTAN, London/Almaty, April 18, 05/ - BG group is satisfied with the deal on sale of its stake in North-Caspian project and intends to concentrate business in development of Karachaganak project (both are in Kazakhstan). "BG is very satisfied with results of the deal (sale of its stake in North- Caspian project. - "IF-K"). (...) The most memorable fact is that KazMunayGas has entered this project", - said Dave E. Roberts the executive vice-president, general director of BG on Asian and Near East countries during a meeting with a group of Kazakhstan journalists in London. The weekly press-tour to London was organized for Kazakhstan journalists by Karachaganak Petroleum Operating B.V. (KPO), 32.5% stake in which belongs to BG. Roberts has marked that now BG intends to activate its activity in Kazakhstan in realization of Karachaganak project. "Company is in a positive mod for developing Karachaganak project because Karachaganak field today is the main object, on which BG will focus the whole attention", - he said. He says that despite the achieved in Karachaganak "rather high" production level, the consortium plans further expansion of capacities in the field. "The field has become capable, that's why BG and its partners have all necessary possibilities for realization of set tasks for the future", - Roberts said. He has noted BG intends "to give maximum support" to Kazakhstan government in realization of the next phase of field's development directed towards gas project realization. In accordance with it, Roberts says, company "on continuing basis" interacts with KazMunayGas country's national oil company concerning increase of investments necessary for growth of hydrocarbon raw stuff production volumes in the field and, as a result, their commercial realization. Roberts has confirmed BG's readiness to take part in building of gas plant in the west of Kazakhstan as well as in the project of expansion of Orenburg Gas-transferring plant's capacities. "According to two variants company has very many interesting and valuable ideas. And after determining an optimal variant BG will be ready to examine its participation in it having brought company's all the best assets to its realization", - he said. Roberts has also said at present BG jointly with partners on the consortium examines the possibility of Karachaganak gas export to Europe, which, in his opinion, "the republic should be interested in". He has marked that KPO does not exclude export of gas from Karachaganak field to other international markets, in particular, to Great Britain, where BG "has very firm and reliable positions in gas sale". Roberts says company also examines the question concerned with expansion of oil export routs. Thus, according to his data, besides Karachaganak oil export through Caspian pipeline consortium (CPC) "the contract with the government provides for the possibility KPO's joining Atyrau-Samara pipeline". At present consortium "very closely" interacts with KazTransOil on this matter. Characterizing BG's relations with Kazakhstan government as a whole, Roberts noted that they were developing "on a rather partner level". "The government supports our contract, and hold a constructive dialogue with it even on any disputable things", - he said. Last week KazMunayGas and Orenburggasprom agreed about foundation a JV on the base of Orenburg GTP for increasing of volume of Karachaganak field's gas refining to 15 bn. cubic meters. It's planned that all practical decisions on JV foundation will be taken during the planned visit of Kazakhstan exporters to Orenburg region in May. In the end of March Orenburggasprom completed reconstruction of a condenser from Karachaganak to GTP, and as the result carrying capacity grew from 7 to 8 bn. cubic meters a year. In 2004 Orenburg GTP transferred 6.5 bn. cubic meters of Karachaganak gas. Karachaganak field is one of the biggest ones in the world, its reserves equal to over 1.2 bn. tons of liquid hydrocarbons and 1.3 trln. bn. cubic meters of gas. According to production-sharing agreement (PSA) with Kazakhstan, this field is developed by Karachaganak petroleum operating consortium. Besides BG consortium comprises ENI with 32.5% stake in this project, ChevronTexaco - 20% and LUKOIL - 15%. Besides, BG is one of shareholders of CPC, which connects Kazakhstan oil reserves with the world markets. BG in the beginning of April completed the deal on selling its stake equaling to 16.67% in the international consortium to Agip KCO, which develops several fields in the North Caspian region, the biggest of which is Kashagan. Kazakhstan side has bought a half of BG's stake in this project, and the second half was divided between participants of the consortium. BG before taxes deduction earned $1.8 bn. This sum includes compensation for BG Group's expenses in Production-sharing agreement on the North Caspian region, which it had since January 1 of 2003 (beginning of the stake sale process) and till deal completion. [2005-04-19]