Malaysia's Sumatec Resources Bhd plans to buy Kazakhstan's Borneo Energy Oil and Gas Ltd. for US$250million (RM800million) in cash and shares.
Sumatec announced on 11 July 2014 that it had signed a framework agreement with Abu Talib Abdul Rahman and Dr. Murat Safin to buy Borneo Energy, which owns 100% of Buzachi Neft LLP.
Buzachi is an independent upstream oil and gas player incorporated in Kazakhstan and its activities include exploration, production, and trading of oil and natural gas.
Buzachi has two, 25-year subsoil use contracts, running until November 2026, to explore and produce oil and gas in Karaturun Vostochnyi and Karaturun Morskoi fields, which are also known as the Buzachi fields, in northern Kazakhstan.
The fields are in shallow water, 1-2m deep, about 277km northeast of Aktau.
Sumatec CEO Chris Dalton (photo at right) said the Buzachi fields have reserves of 68 MMbo. About $80million was invested over the years by Buzachi to develop the fields. "Oil transportation is convenient as the fields are just 180km away from the main Uzen-Atyrau-Samara oil pipeline,” he said.
The fields started production in 2007, and are producing between 400 and 600 bo/d.
Dalton said Sumatec could easily ramp up production as soon as it completes the proposed acquisition.
The Buzachi fields have a combined acreage of about 248sq km. There are 26 wells on the fields, five of which are currently in production.
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