China Eximbank provides $3 billion loan for acquisition of JSC Mangistaumunaigas

On April 15, 2009, Mangistau Investments B.V. (MIBV) — a joint venture between Joint Stock Company National Company KazMunayGas (KMG) (50% equity stake) and CPNC Exploration and Development Company Ltd (CNPC E&D) (50% equity stake) — signed a $3.0 billion facility agreement with the Export-Import Bank of China. MIBV used the proceeds of the loan to acquire a 50 percent ownership stake in the exploration assets of MMG, Kazakhstan’s fifth-largest oil producer, at a purchase price of $2.6 billion. This acquisition was completed on November 25, 2009. CNPC E&D, a Chinese government-owned oil and gas producer, acquired the other 50 percent ownership stake. The transaction included the acquisition of oil and gas fields in Kalamkas and Zhetybai, as well as other upstream and exploration assets, including licenses to explore and develop over 15 other oil and gas fields in Kazakhstan and the Caspian region. It was approved by, inter alia, the European Commission and local anti-monopoly authorities. The China Eximbank loan carried interest at a rate of one-month LIBOR (0.461% in April 2009) plus a 3.5 percent margin and it matured on May 31, 2019. However, due to high oil prices, MIBV repaid the China Eximbank loan ahead of schedule in July 2013.

Additional details

1. Mangistau Investments B.V. (“MIBV”) is a joint venture between Joint Stock Company National Company KazMunayGas (KMG) and CNPC Exploration and Development Company Ltd (“CNPC E&D”), with each partner having a 50 percent ownership stake. 2. JSC Mangistaumunaigas (MMG) is one of the major oil-producing companies in Kazakhstan. The company has 36 oil and gas deposits, 15 of them are under development. The largest deposits in terms of reserves are Kalamkas and Zhetybai. MMG is owned by Mangistau Investments B.V. (“MIBV”), a jointly-controlled entity between KMG and CPNC Exploration and Development Company Ltd (“CNPC E&D”), with each partner having a 50 percent interest. KMG acquired its interest in MMG on November 25, 2009. MMG is one of Kazakhstan’s largest oil producers and operates the Kalamkas Field, one of the largest fields in Kazakhstan, pursuant to a Subsoil Use Agreement that expires in 2027. 3. CNPC E&D is a joint venture equally owned by PetroChina and China National Oil & Gas Exploration and Development Corporation, subsidiaries of CNPC. 4. Multiple sources suggest that CNPC provided a $1.7 billion loan to KazMunaiGas NC JSC in 2009. This issue requires further investigation.

Number of official sources

6

Number of total sources

34