BG Group, Oil and Gas
By the end of the year Gazprom might gain control over some of the assets which Shell purchased previously in 2016 after the amalgamation with BG, the deputy chairman of Gazprom, A. Medvedev, said.
Some assets of BG might be included in the deal on the exchange of assets between Gazprom and Shell. The former assets of BG (now the assets of Shell) are a possible variant in the exchange of assets with us. We have obtained everything they have and now we study. We are interested in the vertically integrated scheme with all level of cost forming, Medvedev said.
It absolutely clear that the deals will be completed by the end of the year, maybe earlier. In 2015 both companies signed a cooperation agreement which presupposes the development of strategic partnership in all segments of the gas sector.
The net profit of Shell fell in Q1 by 89% to $484 mln. The main reasons of the fall are the oil price fall and expenditure for the amalgamation with another energy company – BG Group. Shell also announced of investment cutting by 10% in 2016 – from $33 bln to $30 bln.
Kazakhstan would not qualify for a share of BG Group in a "Karachaganak Petroleum Operating" (KPO) consortium, the head of the national company "KazMunayGas" Sauat Mynbayev stated.
The merger of the Anglo-Dutch oil and gas giant Royal Dutch Shell and BG Group of the British oil company was completed in February this year.
Oil and gas giant Royal Dutch Shell in the merger by the British oil and gas company BG Group plc may lose its share in a major oil field in Kazakhstan, as in the event of deal completion the Government of the country can claim for BG Group’s shares in the project, BG says in its report for 2014.
"In the event of a change of control over BG Group, Kazakhstan can claim the right to purchase the company's share in the final production sharing agreement, which manages the operation of the gas and gas condensate field Karachaganak (BG Group now owns 29.25% in it)," - the British company says.
The Karachaganak field is controlled by a group of investors, which, in addition to the BG Group, are Eni (29.25%), Chevron (18%), Lukoil (13.5%) and KazMunaiGas (10%). As it is noted on the site of BG Group, the currently production at the deposit is carried out at the highest level and is about 45% of the total gas production in Kazakhstan and 16% of the production of liquid hydrocarbons.
On the background of the delay in the project to develop the Kashagan field, Kazakhstan has downgraded its forecast for the oil production to 81.8 million tons in 2014 from the previous target of 83 million tons, Daniyar Berlibayev, the deputy head of Kazakhstan's national company "KazMunaiGas", stated.
"There is a decision on the termination of large-scale investments into the second phase of the Kashagan. All the plans for the future may depend on the field data obtained during the pilot phase", - D.Berlibayev told the Bloomberg agency.
According to the forecast of the "KazMunaiGas" representative this year the production from the existing fields in the country will increase by 1.2 million tons, which is also lower than the previous forecast of 1.5 million tons.
Last year the country produced 81.8 million tons of oil. A substantial portion of this amount (27 million tons) provided the project of developing the Tengiz oil field by the joint venture "Tengizchevroil" (Chevron - 50%, "KazMunaiGas" - 20%, ExxonMobil - 25% and Lukoil - 5%).
In addition, in 2013 the Karachaganak field brought 12 million tons, which is developed by BG (29,25%), Eni (29,25%), Chevron (18%), Lukoil (13.5%) and "KazMunaiGas" (10%).
The Kazakh company JSC ""KazMunaiGas" Exploration Production" (KMG EP is a part of "KazMunaiGas" companies) withdraws from the "White Bear" project, Abat Nurseitov, the head of KMG EP, stated at a press conference on Wednesday.
"Yes, we go out of this project. Since our hopes and estimates failed, the well was dry. The company itself that offered this unit is already gone", - Nurseitov stated.
He added that now KMG EP is preparing the documents for the next board of directors meeting to withdraw from the project.
KMG EP and the BG group signed an agreement
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Undoubtly, the most important event of the last week became the start of the production at Kashagan. As it is known, the production there was planned to be started in 2005, but difficulties with pilot commercial development made investors repeatedly postpone the start of the development. And all the while costs of the consortium increased. Total expenses of the project grew from $57 billion to $136 billion (and according to some reports they have exceeded $180 billion). At the same time, the value of the first stage of the pilot commercial development increased from initial $5 billion to $46 billion. A number of companies (BP, Statoil, BG), sold their shares, left the project and Kazakhstan became one of its big participants.
Rosneft and Lukoil have applied for the right to use the subsoil at the continental shelf of Norwayin the framework of the 22nd license round held by the Government of the country.
The affiliate of Rosneft - RN Nordic Oil AS – and Lukoil are among the candidates for the right to use the subsoil at the Norway continental shelf in the framework of the 22nd round. Read more »