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News 2011

Kazakhmys Petroleum

The deal was concluded on the sale by Kazakhmys Plc of its oil and gas division Kazakhmys Petroleum which was engaged in development of the oil field East Аkzhar in western Kazakhstan. As is said in the message of Kazakhmys, a $100 million deal is subject to approval by regulating bodies. Under the deal's conditions, the buyer, whom the copper company does not name, will pay a potential royalty at a rate of $476 million depending on the future gain from the sale of oil. According to information, the board of directors of Kazakhmys Plc took a decision to sell its oil and gas business "with the aim to concentrate on its primary activity". As it was informed, in March 2007 Kazakhmys Plc and a private firm Total Commerce Solutions Ltd signed an agreement on the purchase and sale of Dostan-Temir LLP, owner of block East Аkzhar. The group then declared that the total amount of assets of this company is estimated at $100 000.

East Аkzhar presents a research block with the area of 602 square kilometres located to the south of Аktobe, in the region of the eastern border of Pre-Caspian lowland. Numerous 2D and 3D seismic survey and other exploration activity were conducted in the area of this block, including drilling of exploration wells. After the purchase of asset, Kazakhmys Plc formed a team to run this project and announced the search of a partner having experience in the oil industry. The leadership of the copper group named the deal on acquisition of the oil and gas block a first step in implementing the strategy of diversification of its business. According to Kazakhmys, the exploration licence for block East Аkzhar, expired in May 2011, was prolonged by two years on the former conditions.