LUKoil secures financing for Kazakh Turgai Petroleum program

Oct 10, 2011 12:00 AM

An agreement has been signed to raise a loan in the amount of up to $ 500 mm for a five-year term for financing the investment program and increasing the working capital of Turgai Petroleum (Kyzylorda Region, Republic of Kazakhstan).
The shareholders of Turgai Petroleum on a parity basis are LUKoil Overseas and PetroKazakhstan (a joint venture of CNPC (66.6 %) and KazMunaiGaz (33.3 %).

The venture is producing hydrocarbons from Kumkol field located 200 km from Kyzylorda city.
The proved reserves of the field are 55 mm tons of oil, 2.94 mm tons of oil and 174 mm cm of gas were produced on the field in 2010.

The loan consists of two tranches. The first tranche ($ 300 mm) will be provided after signing the loan agreement and it was agreed with the lenders that the second tranche ($ 200 mm) may be drawn down within 18 months from the date of entering into the agreement.
The loan will be subject to the interest rate of LIBOR + 2.85 %. The Bank of China (London branch) is the mandated lead arranger of the deal; large commercial banks BNP Paribas (Suisse), Citibank (Kazakhstan), Deutsche Bank and Raiffeisen Bank International took part in the loan syndication.

The financing is provided on non-recourse basis to the shareholders and is secured by the venture's oil export supplies to China.
It is assumed that Turgai Petroleum will supply about 2 mm tons of oil to the Chinese market through the Atasu-Alashankou pipeline, over the term of the loan agreement.

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