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| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. |
Summary of Project Information (SPI) |
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| Project number | 9953 |
| Project name | Lukoil Overseas |
| Country | Kazakhstan |
| Sector | Oil, Gas And Mining |
| Department | Oil, Gas, Mining And Chemicals |
| Company name | Lukoil Overseas Karachaganak B.V. |
| Environmental category | A |
| Date SPI disclosed | March 26, 2002 |
| Projected board date | May 28, 2002 |
| Status | Active |
| Previous Events | Invested: January 30, 2003
Signed: October 30, 2002
Approved: May 30, 2002 |
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| Project sponsor and major shareholders of project company |
| The sponsor of the project is Lukoil JSC of Russia, which has a 15% stake in the Karachaganak field development in Kazakhstan through a subsidiary, Lukoil Overseas Karachaganak B.V. The project is being developed by the international consortium Karachaganak Integrated Organization (KIO), comprising of BG of United Kingdom (32.5% stake), ENI-Agip of Italy (32.5%), ChevronTexaco of United States (20%) and Lukoil of Russia (15%). BG and ENI-Agip are the field operators. |
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| Total project cost and proposed IFC investment |
| Lukoil's share of project costs is US$575 million, and IFC's financing package includes: an A loan of US$50 million for IFC's own account, syndicated B loan of US$75 million and a C loan for IFC's account of US$25 million. |
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| Location of project and description of site |
| Karachaganak Oil and Gas Condensate Field is situated in Burlinsky district of Western Kazakhstan Oblast in the Republic of Kazakhstan. Discovered in 1979, the field has been in operation since 1984. |
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| Description of company and purpose of project |
KIO, as a group of foreign investors, is in charge of the field's development, while BG and Agip have been designated as operators. Lukoil's minority stake is held through a subsidiary organized as a Special Purpose Vehicle (SPV) with no other assets, but the 15% stake in the field. The project is expected to double crude oil and condensate production from the current 100,000 barrels/day (bbl/d) to more than 220,000 bbl/d, and to increase gas production to 1.3 billion cubic feet per day (BCF/d).
The project has a significant developmental impact on the local and national economy of Kazakhstan. In addition to generating significant economic benefits to the country, it has, and will continue to contribute, to Kazakhstan's goal of developing its under-exploited natural resources. Given the considerable money and technical skills needed to develop Kazakhstan’s vast oil and gas reserves, foreign investment is needed to fill the gap. Secondly, the project has already generated local contracting opportunities and created several thousand new construction jobs in a remote area of Kazakhstan. KIO gives preference to materials, equipment, products and services from Kazakh contractors/suppliers when such sources are competitive and it is trying to maximize the local content in the work force. KIO is providing local employees with training in western management, health and safety practices as well as on the use of western technology employed in the field. In addition, KIO spends US$10 million annually for community development. Since 1998, KIO has implemented a number of locally vital projects, such as the reconstruction and refurbishments of several hospitals in the area, installation of the new gas distribution system, road repairs, water distribution system repairs, built a new school for 800 students and repairs of the local theater. |
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| Environmental and social issues - Category A |
This is a Category A project according to IFC’s Procedure for Environmental and Social Review of Projects, because it may result in significant adverse environmental and/or social impacts that are sensitive, diverse or unprecedented.
To view the environmental documents for this project, click here
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| Location of environmental documents in locally affected community |
Aksai,
Dom Detskogo Tvorchestva (House of Children's Arts)
Zheleznodorozhnaya Str.
Aleyonushka Kindergarden
microregion 4
Telephone: +7 31133 30162
Uralsk
44/1 Baturin Str, office 1
Telephone: + 73112 513969, +7 3112 514089
465020, Аtyrau
17, Azattyk Ave,
House of Scientists
1st floor, office 1b
Telephone: +7 3122 229349, + 7 31122 255229 |
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| To contact the project company, please write to: |
Karachaganak Integrated Organization (KIO)
Karachaganak Petroleum Operating b.v.
Kazakhstan Branch Office, Aksai, Burlinsky Region,
West Kazakhstan Oblast, Republic of Kaazakhstan, 418440
Telephone: +44 208 828 8103 (CIS): 8 571 222 2103
Fax: +44 208 828 8132 (CIS): 8 571 222 2132 |
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