Shell acquires Kerr-McGee assets in Kazakhstan

Feb. 6, 2003
Shell Kazakhstan Development BV (SKD) has acquired Kerr-McGee's assets in Kazakhstan for $165 million. The assets consist of Kerr-McGee's equity interest in the Caspian Pipeline Consortium (CPC), in the Arman field, and the Mertvyi Kultuk exploration license. This acquisition has delivered to Shell greater equity and capacity rights in the CPC pipeline, balancing the company's export pipeline capacity with anticipated equity production volumes.

Shell Kazakhstan Development BV (SKD) has acquired Kerr-McGee's assets in Kazakhstan for $165 million. The assets consist of Kerr-McGee's equity interest in the Caspian Pipeline Consortium (CPC), in the Arman field, and the Mertvyi Kultuk exploration license. This acquisition has delivered to Shell greater equity and capacity rights in the CPC pipeline, balancing the company's export pipeline capacity with anticipated equity production volumes.

Shell already owns, in a joint venture with Rosneft, a 7.5% interest in the CPC pipeline with a commensurate capacity right of 60,000 b/d. This acquisition adds a further 1.75% equity with 55,000 b/d capacity rights providing Shell, with expors of 110,000 b/d equity oil in the medium term.

The transaction also includes a 50% interest in the Arman joint venture (JV) whose only field asset is the Arman oil field. The other shareholder in the Arman JV is the national company KazMunaiGaz. The Arman field is in the Mangistau region of Kazakhstan and produces 5,000 b/d. Also, Shell acquired a 100% interest in the Mertvyi Kultuk exploration block at the northeastern shore of the North Caspian Sea. With the acquisition of these assets, Shell will take over operating responsibility for the Arman field and Mertvyi Kultuk block.

In addition to the acquisition of the Kerr-McGee assets, Shell has a 16.7% interest in the ENI-Agip operated North Caspian Sea production sharing agreement, which includes the Kashagan field, and distributes lubricants in the automotive and industrial sectors of the market.

02/06/03