MangistauMunaiGas deal: summary

energy

By SRI ⋅ April 21, 2009 ⋅

(SRI) - KazMunaiGas (KMG), the Kazakh national oil company, and CNPC Exploration and Development Company (CNPC E&D) signed an agreement to jointly acquire the production assets of MangistauMunaiGas, an independent Kazakh producer.

During President Nursultan Nazarbayev’s visit to Beijing last week, China and Kazakhstan signed 11 accords on economic and political cooperation and agreed on $10 billion in loans to Kazakhstan in return for the right to buy a stake in Mangistaumunaigas.

CNPC E&D, which is jointly owned by Chinese national oil companies PetroChina and China National Petroleum Corporation (CNPC), and KMG will acquire MangistauMunaiGas via an equally owned investment vehicle Mangistau Investments B.V. from its current owner Central Asia Petroleum. The transaction is scheduled to be finalized by the end of July 2009, pending all regulatory approvals.

The deal includes all exploration assets currently owned by MMG. “(But) shares in and assets related to Pavlodar oil refinery have been excluded from this deal,” KMG said in a statement. The company did not comment on MMG’s network of gas stations operating under the Helios brand.

CNPC E&D will reportedly pay up to $1.4 billion for its stake in MMG. KMG’s stake in the company is expected to fetch the same, or slightly lower price, and will be covered by a $5 billion loan extended to the company by CNPC.

According to news reports, KMG and CNPC E&P will operate the company as equal partners, and KMG’s previous agreement with Central Asia Petroleum, the current owner of MangistauMunaiGas, to acquire a 50-percent stake plus two shares has been voided.

MMG, founded in 1995, is one of Kazakhstan’s largest oil companies and holds licenses to 36 oil ands gas fields, 15 of which are currently producing crude. The company has licenses to produce hydrocarbons at the oil-and-gas fields Asar, Burmasha, Kalamkas, East Zhetybai, at the oil fields Alatobe and North Asar, at the oil-and-gas-condensate field Zhetybai, at the oil-and-gas field Oimasha, and the oil-and-gas-condensate field South Zhetybai. MMG also owns 58 percent of the Pavlodar Petrochemicals Plant and operates a chain of gas station under the Helios brand.