Sumatec signs MoA with China National Petroleum unit, secures US$20m financing

PETALING JAYA: Sumatec Resources Bhd (SRB) has made strides in its Kazakhstan’s Rakushechnoye oil and gas field development, having signed a memorandum of agreement (MoA) with a unit of China National Petroleum Corp (CNPC) for the exploration and development of the project and accepted an offer for up to US$20 million (RM77.9 million) contractor financing from Talap Munai Service LLP.

In a filing with Bursa Malaysia, SRB said it has entered into a MoA with Xuanhiling Oil Production Plant of Liaohe Oilfield of CNPC to provide full technical service including subsurface, drilling and production engineering works for the oil and gas field project.

“Prior to this, as a show of commitment on the project, Liaohe-Xuanhiling has completed around 5,000 man-hours of reviewing and studying the data of the Rakushechnoye field and carrying out studies on several wells,” it added.

Liaohe-Xuanhiling, which has a crude oil production of more than 12 million metric tonnes per year, currently employs around 7,000 research and design engineers from geology, reservoir engineering, drilling and production engineering and oil and gas processing.

In a separate filing with the stock exchange SRB also said that it had accepted the offer of contractor financing from Talap Munai after being in negotiations since January this year. Talap Munai is a major contractor from China who operates in Kazakhstan and China.

The Rakushechnoye field is a large field with reserves, both in oil/condensate and gas, totalling around 139.4 MMboe of proven and probable (2P) reserves, and the contractor financing proposal is not exclusive. SRB may consider or accept other similar offers from other parties.

“Both Talap Munai and Sumatec agree that this contractor financing shall be repaid by way of cash or in kind that is oil/ condensate barrels or shares of Sumatec or shares of CaspiOilGas LLP (Sumatec’s partner in Kazakhstan),” it said.

Talap Munai has a working collaboration with Liaohe-Xuanhiling, a subsidiary of CNPC, and a long cooperation arrangement with Sinopec Kazakhstan International Petroleum Service LLP for the development of oilfields in Kazakhstan since 2009.