Shell unit completes purchase of Kerr-McGee's Kazakh, CPC interests

By OGJ editors
HOUSTON, Apr. 1 -- Shell Kazakhstan Development BV completed the $165 million acquisition of Kerr-McGee Corp.'s interests in Kazakhstan (OGJ Online, Feb. 5, 2003).

The main object of the acquisition was Kerr-McGee's 1.75% working interest in the Caspian Pipeline Consortium. Shell said that interest balances its export pipeline capacity with anticipated equity production volumes that will come mainly from giant Kashagan oil field in the Caspian Sea, which is expected to begin producing in 3-4 years.

Shell already held, in a joint venture with OAO Rosneft, a 7.5% interest in CPC with a commensurate capacity right of 60,000 b/d escalating to 100,000 b/d with future expansions. The acquired 1.75% interest adds 55,000 b/d of capacity building to 60,000 b/d. The combined interests provide Shell with export capacity of as much as 110,000 b/d of equity oil in the medium term, the company said.

Shell also acquired Kerr-McGee's 50% interest in Arman oil field on the Buzachi Peninsula in the North Ustyurt basin. It is producing 5,000 b/d. Shell becomes operator of Arman field and the nearby, partly explored Mertvyi Kultuk exploration license (see map, OGJ, Aug. 15, 1994, p. 36). The block, which originally included 3 million acres and excluded undeveloped Komsomolsk oil field, lies 30 miles south of supergiant Tengiz oil and gas field.