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. Last Updated: 07/27/2016

LUKoil's Kazakh JV Gets Loan

ALMATY, Kazakhstan -- A Kazakh venture between LUKoil and Toronto-listed Petrokazakhstan said Thursday that it would borrow $75 million to boost investment in the Kumkol oil field and other projects.

Turgai Petroleum said in a statement that the four-year loan would be provided by two West European banks but declined to name them, saying it would disclose the lenders only after final documents were signed.

The loan will be secured with Turgai export contracts. The funds will be used for replenishing the company's working capital and fulfilling its investment program, including further development of the firm's massive Kumkol oil field.

"We have a number of projects, including further development of the north Kumkol field, a separate gas program and probably new works on the east Kumkol field," a Turgai official said.

Turgai produced 42,000 barrels per day from Kumkol in southern Kazakhstan in 2002. It is currently shipping crude by rail to Kazakh Caspian ports for re-export to the West but plans to build a pipeline in the next few years to link the field with the Caspian pipeline, a major export route for Kazakh crude to the West via the Russian Black Sea port of Novorossiisk.

Turgai says the link will allow it to cut costs and export up to 1.5 million tons per year. LUKoil and Petrokazakhstan each hold 50 percent in the venture. Canadian Petrokazakhstan is based in Calgary, Alberta, but all its assets are concentrated in Kazakhstan.