The agreement sets forth transferring a 10% interest in KPO to state-owned KazMunayGas (this assigned interest is to be proportionally distributed among all participants of the project), as well as withdrawal of all lawsuits and settlement of tax and customs claims.
Besides, the Republic of Kazakhstan will provide KPO with an additional 0.5 million tons per year quota for oil pumping through the Tengiz-Novorossiysk pipeline of the Caspian Pipeline Consortium. The quota will further be increased up to 2 million tons per year as the pipeline capacity rises.
The assigned interest value totals $3 billion including the non-monetary equivalent. The operating consortium will pay taxes summing up $1 billion from this amount to the state budget of Kazakhstan.
The Karachaganak field located in West Kazakhstan Region, 140 km from the regional center Uralsk, was discovered in 1979 with its commercial development to start in 1984. The baseline agreement for the field development was signed in 1997 for a 40-year term. The total number of KPO employees is about 4,500 people, 85% of them are Kazakhstan nationals. The Karachaganak Consortium members are BG Group (29.25%), ENI Group (29.25%), Chevron (18%), LUKOIL (13.5%) and KazMunayGas (10%).