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KMG EP and KOGAS awarded the rights to develop one of the largest gas fields in Iraq
20.10.2010 + + + JSC KazMunaiGas Exploration Production (KMG EP) announces that in partnership with Korea Gas Corporation (KOGAS) it has been awarded the rights to develop the Akkas gas field in the Republic of Iraq in the Third Licensing Round organized by Petroleum Contracts & Licensing Directorate of the Iraqi Ministry of Oil. The terms of the proposed deal are $5.5/boe Remuneration Fee Bid and 400 MMSCFD Plateau Production Target.
In accordance with the conditions of the Third Licensing Round, the State Company owned by Iraqi Government will hold 25% equity share in the final consortium with the remainder equally split between KMG EP and KOGAS (37.5%/37.5%). Consortium members intend to conduct negotiations with the Government of the Republic of Iraq and sign the Akkas field development contract within the next few months.
The Akkas gas field is located in Anbar province, in the Western part of Iraq near the Syrian border. The Oil Ministry of Iraq estimates its gas reserves at 5.6 TSCF.
KMG EP Chief Executive Officer Kenzhebek Ibrashev said: “KMG EP actively participates in development of the oil and gas sector in Kazakhstan both by operating our own assets and by going into partnerships with other companies. At the same time we keep looking for attractive projects abroad. Iraq is one of the priority regions for us and we are happy to enter into a mutually beneficial cooperation with the Government of Iraq.”
KMG EP and BG Group have reached an agreement to jointly explore the White Bear prospect in the UK North Sea.
A few weeks before (August 31, 2010) KazMunaiGas Exploration Production (KMG EP) and BG Group plc
announced the signing of an agreement to farm-in into a BG Group operated licence in the United Kingdom Central North Sea – the production licence (P1722) which contains the White Bear prospect. KMG EP is acquiring a 35% interest in the licence.
The agreement, which was signed by KMG EP Chief Executive Officer Mr. Kenzhebek Ibrashev and BG Group Senior Vice President Central Asia and President BG Kazakhstan, Mark Rollins marks the first official venture between KMG EP and BG Group under the terms and conditions of the Upstream Co-operation agreement signed in December 2008.
The White Bear prospect, within the P1722 licence, is located close to the BG Group’s existing Everest and Armada producing assets. BG will retain the remaining interests and will continue to operate the licence on behalf of the partners. The licence carries an outstanding commitment to drill one further exploration well and the partners plan to drill this well in 2011.
The transfer of an interest meets terms and conditions of the cooperation agreement signed in 2008. KMG EP farm-in financial risks including drilling costs and other project liabilities at the HC pre-discovery stage are estimated at USD 25-30 million. KMG EP’s economical evaluation of the project followed the corporate investment criteria reflecting the cost of capital and risks associated with this type of projects.
KMG EP Chief Executive Officer Mr. Kenzhebek Ibrashev said: “This agreement marks the first entry of KMG EP into international operations outwith Kazakhstan. It follows our strategic aims of developing a selected portfolio of quality exploration and production assets, not only within Kazakhstan, which we are continuing to do, but internationally. It also provides us with access to BG Group’s offshore skills, techniques and experience which is important to our mid and longer-term development and to our future expansion of exploration and production activity into the offshore Caspian Sea. We will continue our efforts abroad while maintaining our focus on delivering enhanced performance from our core assets and associate interests within Kazakhstan.”
BG Group Senior Vice President Central Asia and President BG Kazakhstan, Mark Rollins, said: “We at BG Group are delighted to be working with KazMunaiGas Exploration Production as a partner of choice and greatly value our cooperation in this high potential project. We are pleased to have reached this agreement and we are confident that the transfer of an interest in the White Bear prospect to KazMunaiGas Exploration Production will result in a new era of beneficial cooperation for the strategic partnership between BG Group and the Republic of Kazakhstan.”
For further information please visit www.kmgep.kz
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