KazMunayGas acquires a 60% stake in the Dunga oil field

KazMunayGas has announced that it closed a deal with TotalEnergies EP Danmark A/S, a subsidiary of TotalEnergies, and acquired 100% in Total E&P Dunga GmbH which owns a 60% stake in the Dunga oil field.

«KazMunayGas (KMG) announces that a deal to acquire 100% shares in the charter capital of Total E&P Dunga GmbH and ownership rights in the Dunga project from TotalEnergies EP Danmark A/S (a subsidiary of TotalEnergies) is closed. The deal was executed under the agreement on sale and purchasing signed by KMG and TotalEnergies EP Danmark A/S earlier this year,» the oil company said in a statement.

In June 2023, Dastan Abdulgafarov, deputy head of KMG, said that the company would reach the closing stage of acquiring a 60% stake in Total E&P Dunga GmbH (a subsidiary of French TotalEnergies) very soon.

«KMG has claimed its priority right (on acquiring a stake in the company engaged in the Dunga project). The Ministry of Energy supports this intention. We are at the final stage of negotiations with Total. I think we will reach the final stage of the deal very soon. Meanwhile, the negotiations are still on their way,» he said at the time.

Last year, TotalEnergies, the biggest oil and gas company in France, agreed to sell its subsidiary Total E&P Dunga GmbH to Oriental Sunrise Corp Ltd, another subsidiary of Total, for $330 million. As the company said, this sale was made to meet the goals of the energy transition strategy in Kazakhstan.

Total E&P Dunga GmbH controls 60% of the Dunga oil field in Kazakhstan which produces around 7,400 barrels of oil equivalent per day. The other two stakeholders of the company are Oman Oil Company Limited (20%) and Partex Kazakhstan Corporation (20%). The deal must have been confirmed by the government of Kazakhstan, while the partners should have dropped their priority rights. Oriental Sunrise Corp Ltd was registered just several days before the deal on November 17, 2022, in the Astana International Financial Center.

The Dunga oil field is located in the Tupkaragan district of the Mangystau region. Its geological reserves consist of 106 million tons of oil and more than six billion cubic meters of gas. The oil field is being developed under a sharing production agreement.

“KazMunayGas had a priority right to purchase shares in different oil and gas projects in Kazakhstan. In this case, the company decided to exercise its right. However, even with full support from the Ministry of Energy implementation of the deal fell behind schedule.

Once the deal is closed, TotalEnergies will continue to control 16.81% of the North Caspian Operating Company supervising the Kashagan project. In October 2022, some media outlets reported that since September Total Dunga had been exporting its oil to Europe via the port of Atyrau and the Baku-Tbilisi-Ceyhan pipeline in order to avoid risks associated with oil exports via Russia.

On October 5, 2021, Ex Energy Minister Magzum Mirzagaliyev (currently CEO of KMG) told the cabinet that Total would invest $152.8 million in 2021-2025 to implement the third phase of exploitation of the Dunga oil field. The Ministry of Energy has extended the production-sharing agreement with Total on the Dunga field from 2024 to 2039. In return, the company promised to invest $152.8 million in the implementation of the project to boost oil output from 680,000 tons to 860,000 tons per year.