News 2024
February 2016Karachaganak
Kazakhstan will not buy out BG Group’s share in Karachaganak. Regulations for the application of the priority right of the State to acquire the right of subsoil use in Kazakhstan does not apply to the transaction between the Royal Dutch Shell and BG Group companies, Press service of the Ministry of Energy reported to Interfax-Kazakhstan agency.
According to art. 12 of the law “On subsoil and subsoil use” dated June 24 2010 the State has a priority right over the other contract party or parties to a legal body who has the right of subsoil use, and others on the acquisition of alienated on compensated and uncompensated grounds subsoil use rights (its parts) and (or) objects associated with the right of subsoil use, stated in the Ministry’s response to the request of the Agency.
At the same time, under the objects, associated with the subsoil use right, based on the law on subsoil refers to equity shares (blocks of shares) in a legal body having the right of subsoil use, as well as legal body that has the ability to directly and (or) indirectly influence the decisions and (or) influence the decision making of such subsoil user if primary activity of that legal body is connected to subsoil use in the Republic of Kazakhstan, clarified in the Ministry of Energy.
“However, due to the fact that primary activity of the Royal Dutch Shell and BG group companies is not connected to subsoil use in the Republic of Kazakhstan, regulations for the application of the priority right of the State do not apply to the deal between the Royal Dutch Shell and BG Group”, noted in the Ministry. On February 15th Royal Dutch Shell announced the closing of a merger with BG Group. The deal of BG and Shell costing about $50 billion became the largest in the oil and gas sector over the last decade. BG Group in Kazakhstan owns 29.25% share in Karachaganak project.