Azernews.Az

By Aynur Karimova

Chinese Xinjiang Zhundong Petroleum Technology Company plans to buy 100 percent of the entity Galaz & Co LLP, Roxi Petroleum company said on January 8.

Galaz & Co LLP holds the license for the Galaz Contract Area in Kazakhstan. It is owned by Roxi Petroleum (34.22 percent interest), Korean Multinational (40 percent) and Baverstock (23.78 percent).

The Chinese company is ready to pay up to $100 million, including the debt for which it has been granted an exclusivity period to January 31, 2015.

The proposal is subject to due diligence. The signing of binding documentation depends on the approval of both Kazakh and Chinese regulatory authorities.

Roxi confirmed that although a sale will be concluded on the disclosed terms, the company has already entered into a non-binding terms. It is now working with Xinjiang Zhundong and the other shareholders in Galaz to complete the sale of Galaz on these terms.

Of the $100 million disclosed, approximately $50.4 million relates to the equity of Galaz & Co LLP and approximately $49.6 million to the assumption of shareholder loans owed by Galaz & Co LLP.

The Galaz block is located in the Kyzylorda Oblast in central Kazakhstan. The contract was extended in 2011 to 179 square kilometres and now includes significant exploration upside on the east side of the Karatau fault system, as well as the NW Konys development.

Pilot production began in 2012 after approval of the NW Konys Pilot Production Plan from the Oil and Gas Ministry with emissions and flaring permits received from the relevant authorities.

Since 2008, some 17 wells have been drilled at Galaz, a significant number of which are commercial. Wells NK-3, NK-5, NK-7, NK-8, and NK-9 are on extended test producing in aggregate 1,000 bopd on average. Additionally, Wells NK-4, NK6, NK-12 and NK-31 are being prepared to commence test production.

Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

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