BG Group, the Republic of Kazakhstan and other contracting companies completed an agreement concerning the Karachaganak gas-condensate field in northwest Kazakhstan.

As part of the agreement, the Republic has acquired a 10% interest in the Karachaganak final production sharing agreement for $2 billion cash and $1 billion non-cash consideration (pre-tax), including the final and irrevocable settlement of all cost recovery claims. Tax of $1 billion is payable on the gain from the disposal.

The agreement also includes allocation of an additional 2 million tons per year capacity in the Caspian Pipeline Consortium export pipeline over the remaining life of the agreement. The additional capacity starts at 0.5 million tons immediately and rises to 2 million tons during CPC expansion, which is underway and expected to complete over the next three years.

Completion of the agreement also provides for exemption from export custom duties for the project until 2038, the remaining 26 years of the FPSA term; and final agreement on all tax and customs matters up to the end of 2009.