Japan Oil, Gas and Metals National Corporation (JOGMEC) will provide equity financing to Inpex for the Kashagan oil field development in the North Caspian Sea, offshore Kazakhstan.
The financing will go through Inpex’s subsidiary, INPEX North Caspian Sea Ltd. (INCS), which holds a 7.56% equity interest in the Kashagan project, JOGMEC said on Thursday.
Inpex Corporation has a 51% stake in INCS and JOGMEC has the remaining 49%.
JOGMEC stated that the estimated amount of equity financing is approximately JPY 60 billion ($566.8M).
Located in the Kazakhstan sector of the Caspian Sea, the Kashagan field with approximately 9-13 billion barrels of recoverable oil, known as the world’s largest discovery in the past four decades, has achieved stable production since October 2016.
The Kashagan project is operated by North Caspian Operating Company (NCOC), on behalf of a consortium of national and international oil companies including Inpex. Other stakeholders are KazMunayGas, Eni, ExxonMobil, Shell, Total, and PetroChina.
The Phase I development, or the experimental program, is still underway to ramp up oil production to a capacity of 370,000 barrels per day at the earliest possible. Beyond the experimental program, NCOC plans future development phases to gradually and significantly increase output volumes.
Since the establishment of INCS in 1998, JOGMEC, as Japan National Oil Corporation until 2005, has been continuing its financial supports to INCS, including equity investment covering exploration expenditures and gurantee for the initial development loan. Grant of JOGMEC development equity finance will allow INCS to raise capital required for further Kashagan development to boost production.
This is the first-ever development investment since the amendement of the JOGMEC Law enacted in November 2016 where JOGMEC functions were enhanced to enable it, the company said.
JOGMEC concluded that its continued support to INCS will contribute to diversifying and increasing crude supply to Japan for a longer time through the further expansion of giant Kashagan.