* Kazakhstan's National Fund to issue bonds
* Finance will help KazMunaiGas develop Kashagan field
* Funds to be disbursed in 2013 and 2015
By Raushan Nurshayeva
ASTANA, Feb 29 Kazakhstan on Wednesday
approved a plan to lend state oil and gas company KazMunaiGas $4
billion from its windfall oil fund to help develop the massive
Kashagan oilfield in the Caspian Sea.
The National Fund, which held more than $45 billion at the
end of last month, will issue bonds to help KazMunaiGas finance
its participation in Kashagan, the biggest oil discovery in more
than 40 years.
The funds will be disbursed in two tranches, the first in
2013 and the second in 2015, a statement issued by the
presidential office on its website, www.akorda.kz, showed.
Spending from the National Fund must be approved by a
council chaired by President Nursultan Nazarbayev, who has ruled
Kazakhstan since 1989, two years before the country gained
independence from the Soviet Union.
Kazakhstan, Central Asia's largest economy, holds more than
3 percent of the world's recoverable oil reserves and is the
second-largest producer in the former Soviet Union after Russia.
The state joined the consortium developing the Kashagan
project in 2005 and has since doubled its stake to 16.8 percent.
The offshore field, which faces significant technical
challenges, is scheduled to produce its first oil at the end of
2012 or early 2013.
"Our participation in this project is imperative in the
future. Besides our stake, the physical oil itself is important
for Kazakhstan," Prime Minister Karim Masimov told a government
Other members of the Kashagan consortium include Eni
, Royal Dutch Shell, Total,
ConocoPhillips, ExxonMobil and Inpex.
Nazarbayev used his annual state-of-the-nation address last
month to unveil a series of major investment projects that would
draw on resources from the National Fund.
During the last wave of global economic crisis, Kazakhstan
spent approximately $10 billion from the fund. In late 2008, the
cost of a barrel of Brent crude dropped below $40
compared with more than $120 today.
(Writing by Robin Paxton)