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.