IFC to Invest $150 Million in Kazakhstan Oil Field
L. Joseph
Phone: (202) 473-7700
Fax: (202) 974-4384
E-mail: ljoseph@ifc.org
Astana, Kazakhstan, October 31, 2002—The
International Finance Corporation (IFC), the private sector development
arm of the World Bank Group, has signed loan agreements with Russia’s
premier oil company, Lukoil, to participate in one of the most significant
projects in Kazakhstan’s oil and gas sector. This major multi-billion
dollar project—one of three large-scale oil field developments in the
country and the first syndicated oil and gas transaction involving long-term
tenors—includes development of the world-class Karachaganak oil, gas,
and condensate field as well as a 635-km connecting pipeline from the oil
field to the Caspian Pipeline Consortium (CPC), which will transport the
oil through Kazakhstan and Russia to the Black Sea. When completed
in early 2004, the project will form a key part of Kazakhstan’s total
oil and gas exports.
“We are very pleased to be associated with a project of such importance
to Kazakhstan, and one which will contribute to the country’s efforts
to increase its oil and gas production, ” said Mr. Rashad Kaldany, IFC
Director for Oil, Gas, Mining, and Chemicals.
IFC’s US$150 million financing package to Lukoil Overseas Karachaganak
B.V. (Lukoil B.V.) will support the company’s share of development costs
and consists of a $50 million A-loan for IFC’s account; a $75 million
B-loan; and a $25 million subordinated C- loan, also for IFC’s account.
IFC’s B-loan is expected to break new ground by bringing in at least
five international commercial banks under IFC’s umbrella.
Mr. Khosrow Zamani, IFC Director for Southern Europe and Central Asia,
noted, “The Karachaganak project is a demonstration of IFC’s commitment
to promote sustainable development.”
Lukoil B.V. is a wholly owned subsidiary of Russia’s Lukoil, which has
a 15 percent shareholding in the Karachaganak field development. The
project is being jointly developed by BG of the United Kingdom (32.5 percent),
ENI-Agip group of Italy (32.5 percent), ChevronTexaco of the United States
(20 percent), and Lukoil.
IFC has worked actively to support the development of a strong private
sector in Kazakhstan since it became a member of the Corporation in 1993.
IFC has approved investments for its own account of over $400 million
as well as over $270 million from other sources of financing.
IFC’s mission is to promote sustainable private sector investment in developing
countries, helping to reduce poverty and improve people's lives. IFC finances
private sector investments in the developing world, mobilizes capital in
the international financial markets, and provides technical assistance
and advice to governments and businesses. Since its founding in 1956
through FY02, IFC has committed more than $34 billion of its own funds
and arranged $21 billion in syndications for 2,825 companies in 140 developing
countries. IFC's worldwide committed portfolio as of FY02 was $15.1
billion for its own account and $6.5 billion held for participants in loan
syndications.
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