China’s Sinopec refuses to buy the “Lukoil” assets in Kazakhstan, although the sales contract was signed almost a year ago. The price of issue – $ 1.2 billion. “LUKoil” appealed to the London arbitration. According to sources “Gazety.Ru”, the Chinese refused the deal because of falling oil prices.
«Lukoil” begins in London arbitration procedures in relation to the Chinese Sinopec about “significant harm “. This is the Russian company said on Monday. We are talking about claims arising in connection with the release of Sinopec deal to buy 50% stake in Caspian Investment Resources Ltd (CIR), which belong to “LUKOIL”. The second half of CIR already belongs to a Chinese company.
CIR owns stakes in four oil and gas projects in Kazakhstan – North Buzachi (50%), and Alibekmola Kozhasaya (50%), Karakaduk (100%) and Arman (100% ). Total reserves are estimated at 160 million tons of liquid hydrocarbons. Total production from the project last year amounted to about 3.67 million tonnes.
Initially, “LUKOIL” owned 100% CIR, but in 2006 the company sold for $ 980 million fund half of the shares of Indian businessman Lakshmi Mittal Mittal Investments. In 2010, Mittal sold these shares of Chinese Sinopec.
In April 2014, “Lukoil” announced the signing of an agreement of purchase and sale of its own 50% Caspian Investment Resources of the same Sinopec . Amount of the transaction was to be $ 1.2 billion, but the message of the Russian company stated that the price of “subject to a number of adjustments to the date of completion of the transaction».
As mentioned in the release of “LUKOIL” deal was to serve as foreign portfolio optimization, to complete its planned before the end of 2014.
«Kazakhstan has been trying to become a massive player in the global carbon market, but so far it is not, – said the chief of department of economic department of the Institute of Energy and Finance Sergei Agibalov. – This is mainly due to a virtual standstill at the moment the largest Kashagan project in the Caspian Sea, which occurred due to errors in the design. The last was the cause of several accidents, which, in turn, require a new round of capital investments ».
According Agibalova, it creates a negative background around the Kazakhstan projects. However, “Lukoil”, selling CIR, said that the remains in such projects as Kumkol, Karachaganak and Tengiz.
In the “LUKOIL” declined to comment on the reasons for exit from Sinopec deal, but a source in the oil Industry says that it happened because of falling oil prices. The price of a barrel since mid-summer last year fell by almost half – from $ 110 to $ 58 on Monday (and earlier dropped to $ 45, and).
«This increases the risk of project payback,” – says the head of the analytical company Small Letters Vitaly Kryukov.
The partner of the law firm Lidings Andrey Zelenin believes that the parties could not agree on a price change of an asset, as it was stipulated in the contract of sale.
” Most likely, now “Lukoil” is seeking to recover losses incurred due to the fact that Sinopec delayed the closing of the transaction, – said the lawyer. – Otherwise, “Lukoil” could manage to sell its stake in CIR another buyer ».
But this lawyer notes that the arbitration will assess whether or not the” Lukoil “would be able to sell to -That the asset and whether the actual damage incurred.
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