Deals



MOL Hungarian Oil and Gas Plc. has signed Share Purchase Agreement with KMG EP


Posted: 3rd April 2013 08:58

MOL Hungarian Oil and Gas Plc.  (“MOL”) and KazMunaiGas Exploration Production JSC (KMG EP) have  announced the conclusion of the Share Purchase Agreement with MOL  on the indirect acquisition by MOL of 49% of shares in Karpovskiy Severniy LLP.  Karpovskiy Severniy LLP  is a subsoil use right holder under the Contract for Exploration of Oil, Gas and Condensate at Karpovskiy Severniy contract area in the Western Kazakhstan region.
 
Karpovskiy Severniy LLP  offers oil and gas exploration services.  It owns and operates a subsoil exploration block covering an area of 1,669.2 square kilometers.  The company was founded in 2009 and is based in Almaty, Kazakhstan.  The Karpovskiy Severniy block is located approximately 40 km northwest of Uralsk, in the vicinity of Fedorovskiy block and existing discoveries, at the northern edge of the Caspian Depression.
 
As a result of this transaction KMG EP will form a joint venture with MOL to conduct further exploration activities on Karpovskiy Severniy exploration block. 
 
KMG EP is engaged in the exploration, development, production, processing, export of hydrocarbons and the acquisition of oil and gas assets.  KMG EP’s  core operations are oil and gas properties located in the Pre-Caspian, Mangistau, Southern Torgai basins.  KMG EP’s majority shareholder is JSC National Company KazMunaiGas (NC KMG), the wholly state-owned joint stock company which represents the state’s interests in the Kazakh oil and gas industry.  KMG EP conducts its core production activities at 47 oil and gas fields, including “Uzenmunaigas” (“UMG”), which consists of 2 fields, “Embamunaigas” (“EMG”), which consists of 40 fields and “Kazakh Gas Refinery” LLP which consists of 5 fields.
 
This transaction will allow KMG EP to share exploration risks and financial obligations with MOL.  It can also be expected that KMG EP operational synergies may exist with the neighbouring Fedorovskiy block, where KMG EP has 50% and MOL has 27.5% shareholdings and the consortium led by MOL achieved a significant gas-condensate discovery in 2008.
 
MOL owns and operates refineries, oil and gas pipelines, service stations, and natural gas storage facilities. The Company produces crude oil, petroleum products, bitumens, lubricants and natural gas. Founded in 1991, MOL is a major Central European company in the integrated oil and gas industry with extended international upstream portfolio. MOL is a market leaders in each of our core activities in Hungary, Slovakia and Croatia. Key businesses: The Exploration and Production segment has oil and gas exploration activities in 15 countries and producing assets in seven countries. MOL has recorded several discoveries in Hungary, Russia, Pakistan, Syria, the Kurdistan Region of Iraq, Egypt and Kazakhstan in recent years. The Refining and Marketing segment operates five refineries in the CEE region under joint supply-chain optimisation on adjacent markets. Crude supply and product distribution are supported by an extensive pipeline and depot network.
 
Morgan Lewis and Brada LLP advised MOL Hungarian Oil and Gas. Field Fisher Waterhouse LLP and Van Doorne advised KMG EP. 
 
Alik Aidarbayev, CEO, noted: “The sale of 49% of subsoil use rights on “Karpovskiy Severniy” exploration block is in line with our strategy to form strategic partnerships with international oil companies which have good operating experience and good exploration records.  Exploration activities on perspective blocks will result in growth of resources of KMG EP.  We will continue with our exploration activities to build a base for organic growth of the Company.”
Dutch legal adviser to MOL, the Hungarian oil and gas group
Partners Jouke Brada and Gerben den Hertog commented: 
“We advised MOL on the transaction that was structured via a Dutch joint venture entity. The transaction team of Brada LLP was led by Jouke Brada (senior partner) and Gerben den Hertog (partner). We have ample experience in the fields of mergers and acquisitions, joint ventures and corporate governance. In particular on the transaction structure and the governance our excellent corporate attorneys and experienced tax attorneys provided MOL indispensable added value.”
Mr Jouke Brada and Mr Gerben den Hertog can be contacted on + 3120 577 40 00 or by email at jb@bradalaw.com or gh@bradalaw.com

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