An agreement has been signed to raise a loan in the amount of up to USD 500 million for a five-year term for financing the investment program and increasing the working capital of Turgai Petroleum (Kyzylorda Region, Republic of Kazakhstan).

 

The shareholders of Turgai Petroleum on a parity basis are LUKOIL Overseas and PetroKazakhstan (a joint venture of CNPC (66.6%) and KazMunayGaz (33.3%). The venture is producing hydrocarbons from Kumkol field located 200 km from Kyzylorda city. The proved reserves of the field are 55 million tons of oil, 2.94 million tons of oil and 174 million cubic meters of gas were produced on the field in 2010.

 

The loan consists of two tranches. The first tranche (USD 300 million) will be provided after signing the loan agreement and it was agreed with the lenders that the second tranche (USD 200 million) may be drawn down within 18 months from the date of entering into the agreement. The loan will be subject to the interest rate of LIBOR + 2.85%. The Bank of China (London branch) is the mandated lead arranger of the deal; large commercial banks BNP Paribas (Suisse), Citibank (Kazakhstan), Deutsche Bank and Raiffeisen Bank International took part in the loan syndication.

 

The financing is provided on non-recourse basis to the shareholders and is secured by the venture's oil export supplies to China. It is assumed that Turgai Petroleum will supply about 2 million tons of oil to the Chinese market through the Atasu - Alashankou pipeline, over the term of the loan agreement.