Kazakhstan to Sign $1 Billion in Disputed Karachaganak Field

Kazakhstan will next week take a 10 per cent stake in the Karachaganak oil and gas field in the country at a cost of $1 billion and an end to a long running dispute between the country and foreign interests in the field.

Reuters reports that the $1 billion cost will entitle Kazakhstan to 5 per cent of Karachaganak Petroleum Operating Group, with the other 5 per cent seeing them drop legal challenges against the members of the Karachaganak consortium.

The consortium currently consists of four foreign interests. British BG Group and Italian Eni hold the majority stakes in the consortium at  32.5 per cent each; Chevron holds a 20 per cent stake in the consortium with LUKOIL holding the final 15 per cent.

The massive Karachaganak field currently supplies approximately fifty per cent of Kazakh gas supply.

The deal between the consortium and Kazakhstan's state-run KazMunaiGas is expected to be signed by the end of the week.