KazMunaiGas EP spends $2.25 bln on stakes, bonds

08:33, 14 July 2010

ASTANA. July 14. KAZINFORM KazMunaiGas Exploration Production, the London-traded arm of Kazakhstan's state oil producer, plans to spend $2.25 billion buying stakes in three oil production units as well as bonds from its parent company; Kazinform refers to Bloomberg.

KazMunaiGas EP will pay $750 million for stakes in three oil production units, the Astana-based company said in a statement today. It also "intends to purchase" 220 billion tenge ($1.5 billion) of three-year bonds that will be issued by KazMunaiGaz National Co.

The purchase of the stakes will boost KazMunaiGas's oil production by almost a third, and result in an increase in proven and probable reserves of 406 million barrels. The parent company aims to become one of the world's 30 biggest oil producers by 2015.

KazMunaiGas EP will be able to use the bonds to pay for future acquisitions of the parent's assets, Alexander Gladyshev, head of investor relations, said by telephone from the Astana. The parent company will offset future dividends from the unit against outstanding bonds.

KazMunaiGaz National confirmed that it is considering the transfer of a number of new exploration blocks to KazMunaiGas EP later this year; Kazinform cites Bloomberg Business Week.

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