Reach Energy aims to conclude Kazakhstan O & G deal by year-end

Reach Energy Bhd Managing Director Ir Shahul Hamid Mohd Ismail speak to media at the press conference after the Listing Ceremony of the Largest Oil and Gas SPAC, Reach Energy Bhd yesterday. MUHAMAD SHAHRIL ROSLI/The Star.

ASTANA (Kazakhstan): Reach Energy Bhd aims to conclude its acquisition of onshore oil and gas (O & G)-producing fields in Kazakhstan by year-end.

Managing director/chief executive officer Shahul Hamid Mohd Ismail said the company was expected to hold an EGM in August or September to obtain shareholders approval. 

“We hope to convince the shareholders that this acquisition will open more doors for us in Kazakshtan, but we do understand that they are anxious about the acquisition because of the current low oil prices.

“I have worked in the industry long enough to see oil prices fall six times to as low as US$10 per barrel at one time and yet we were still making money,” he told reporters on the sidelines of the Astana Economic Forum (AEF) on Tuesday.

Saying that the company submitted the qualifying acquisition to the Securities Commission of Malaysia on Tuesday, Shahul Hamid added the group was confident that the oil price would recover gradually.

On March 5, Reach Energy announced to Bursa Malaysia its proposal to acquire a 60% stake in Palaeontol BV, which owns the onshore O & G field, Emir-Oil LLP, in Kazakhstan for US$154.9mil (about RM638.2mil), from Hong Kong-based MIE Holdings Corp.

Emir-Oil owns production contracts of four producing oil blocks (Aksaz, Dolinnoe, Kariman and Emir), as well as, an oil and gas exploration contract in Kazakhstan that extends over 850.3 sq km. 

Shahul Hamid said the oilfields would present good returns to the company and shareholders considering they were still in the early phase of their life cycle.

On the ease of doing business in Kazakhstan, he said the Kazakh government provided a good ecosystem for foreign companies and it was eager to welcome more Malaysian companies into the country.

“Kazakhstan is ready to take off. Malaysian companies, especially public listed companies, should look into the massive opportunities here.

“Besides oil and gas, we see huge potential for investments in the services, infrastructure and education sectors,” he added.

The two-day AEF that began on Wednesday, themed ‘New Economic Reality: Diversification, Innovations and Economics of Knowledge’, serves as a platform to discuss progress and identify steps to ensure Kazakhstan achieves high economic growth. - Bernama