ALMATY, Kazakhstan — LUKoil will receive about $438 million to help end an ownership dispute that arose when China National Petroleum Corporation bought the Russian oil producer's partner in a Kazakh oil venture in 2005.
PetroKazakhstan and LUKoil will each retain their 50 percent stakes in the venture, Turgai Petroleum, state-run KazMunaiGaz Exploration Production said Friday in a statement. KazMunaiGaz owns PetroKazakhstan with CNPC.
LUKoil made a rival bid to buy PetroKazakhstan five years ago as Russia and China jostled for access to Central Asia’s energy resources. LUKoil, the country's largest private oil producer, sought to exercise a right of first refusal to buy PetroKazakhstan out of Turgai in 2008, saying CNPC was not offering it acceptable projects as an alternative.
“This allows LUKoil to avoid problems in Kazakhstan, and they get an inflow of real cash,” said Pavel Sorokin, an oil and gas analyst for Alfa Bank.
The agreement, signed Aug. 16 in Moscow, gives LUKoil the right to dividends from Turgai, which it has not received since 2008, said a LUKoil spokesman, who declined to be identified citing company policy.
KazMunaiGaz EP said it also might get a portion of dividends, which were halted during the arbitration period, through its stake in PetroKazakhstan.
Turgai Petroleum produced an average of 68,000 barrels per day last year and holds proven and probable reserves of 104.4 million barrels, according to KazMunaiGaz EP.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
