Kazakhstan yet to decide on exercising priority right to Lukoil stakes - Energy Ministry

ASTANA. June 1 (Interfax) - Kazakhstan has not yet made any decision on exercising its priority right to buy out Lukoil's stakes in joint projects, the Energy Ministry told Interfax.

"At this stage, no decisions have been taken on exercising the priority right to purchase stakes in specific projects," the ministry said in response to an inquiry about whether Kazakhstan plans to exercise the right of first refusal to buy back shares in joint projects with Lukoil.

Last week, Kazakh Energy Minister Erlan Akkenzhenov told journalists that Kazakhstan was not currently holding any negotiations with Lukoil.

However, in January he said that Kazakhstan had sent a notification to the Office of Foreign Assets Control (OFAC), the U.S. Treasury Department structure responsible for sanctions enforcement, regarding Lukoil's shares in joint projects, which mentioned the country's right of first refusal to buy them back under national legislation.

The ministry is considering options for buying back the share that are not necessarily tied to cash payment, he said.

In Kazakhstan, the joint Lukoil projects Kalamkas-Sea and Khazar have been suspended because of sanctions. State oil company KazMunayGas (KMG) and Lukoil are working to resolve financing for their further development.

Lukoil has operated in Kazakhstan since 1995 and holds stakes in several major projects: Karachaganak (13.5% in operator Karachaganak Petroleum Operating B.V.), Tengiz (5% in Tengizchevroil LLP), Kumkol (50% in JSC Turgai Petroleum) and the Caspian Pipeline Consortium (CPC, 12.5%).

The U.S. Treasury added Lukoil to its sanctions list on Oct. 15, issuing a wind-down license. Several international projects in Kazakhstan involving Lukoil - including CPC, Tengizchevroil and Karachaganak - were granted immediate sanctions exemptions valid through October 14, 2027.