RI firm wins Kazakhs' Mangistau Oil tender

RI firm wins Kazakhs' Mangistau Oil tender

ALMATY (Reuter): A senior Kazakh official said yesterday that Central Asia Petroleum Ltd, part of Indonesia's Setdco Group, has won a tender for a 60 percent stake in the former Soviet republic's largest oil producer, Mangistaumunaigaz.

"Central Asia Petroleum has won the exclusive right to negotiate a contract with us," Maksutbek Rakhanov, first deputy chairman of Kazakhstan's state privatization committee, told Reuters in an interview.

The company beat five other competitors, promising a US$248 million bonus to the Kazakh government, Rakhanov said.

The other competitors were Oryx Energy Co and K&B of the United States, Vitol-Kazakhstan (a joint venture with Dutch oil trader and refiner Vitol), Neft S.A. of Russia and Kazakhstan's ZAO Mangistaumunaigaz.

The troubled enterprise, located near Kazakhstan's Caspian Sea coast, accounts for about one third of Kazakh oil production. It produced six million tons of oil (120,000 barrels per day) and 1.8 billion cubic metres of gas in 1995.

Rakhanov said the enterprise was sitting on 201 million tons of proven oil reserves.

Along with the bonus, Rakhanov said Central Asia Petroleum had drawn up a five-year investment program of $1.5-2.0 billion and had agreed to meet part of the company's $100 million debts. He gave no further details.

"They (Central Asia Petroleum) have promised a big investment program," said Rakhanov. "We think Mangistau needs about $2.0 billion of investment to make it a success," he said.

Rakhanov said there were still "many questions" to be decided before the two sides sign a contract. He gave no date for a possible signing.