KMG to get Karachaganak shares by October

September 07. Universal Newswires

KMG to get Karachaganak shares by OctoberKazakhstan will complete negotiations to buy a 10 percent stake in the foreign-led supergiant Karachaganak energy project before the end of October, the country’s national welfare fund chief said Wednesday.

Samruk-Kazyna Chairman Timur Kulibayev made the announcement during a news conference in the capital city Astana. The fund manages more than two-thirds of the country’s economy.

Negotiators from KazMunaiGas (KMG), a state-owned oil and gas company controlled by Samruk-Kazyna, have held months of fractious talks with the foreign-led consortium.

KMG says it is prepared to drop a raft of charges against the group in return for a piece of the action. Karachaganak, one of the biggest oil and gas fields in the world, produces nearly half the republic’s gas output and 18 percent of its crude.

The Kazakh government previously demanded millions of dollars in fines against the Karachaganak Petroleum Operating Group (KPO) for evading taxes, breaking ecological regulations and overstating operating costs.

The consortium, led by Italian and British energy majors, denies any wrongdoing.

Italy’s ENI and Britain’s BG Group each have a 32.5 percent holding in Karachaganak. Chevron has a 20 percent stake in the project and Russia’s Lukoil owns a 15 percent slice.