Kazakh KMG E&P to pay $930 million for 50 percent in CITIC
MOSCOW (Reuters) - Kazakh oil firm KazMunaiGas E&P (KMGq.L) will pay $930 million to buy half of Chinese firm CITIC Group's Kazakh oil assets, which CITIC purchased last year from Canada's Nations Energy, the Kazakh firm said on Wednesday.
CITIC agreed to pay $1.9 billion for Nations Energy, but was forced to give KazMunaiGas the option to buy 50 percent when the Kazakh government threatened to block the sale.
The Kazakh company said its board had approved the deal, including $875.5 million of purchase costs and $54.5 million of financing costs. The acquisition is expected to be completed before the end of the year.
CITIC's main asset is Karazhanbasmunai, a large oil and gas company developing the Karazhanbas field in the western part of Kazakhstan with total proven reserves of 363.8 million barrels of oil and output of 2.3 million tons a year or 42,700 barrels per day.
The Chinese group has said it would guarantee an $805 million loan to let KazMunaiGas buy half the asset.
On Wednesday KMG E&P said some $150 million will come from its own funds while CITIC will provide financing of the remaining balance.
"With the acquisition of Karazhanbasmunai we continue to implement our growth strategy by adding another 10 percent to our current production level," the statement quoted Askar Balzhanov, Chief Executive Officer of KMG E&P.
