Re-issue of BNG Contract Area licences
Caspian Sunrise plc has announced significant tax concessions for its BNG Contract Area, including an Alternative Subsoil Use Tax and a temporary exemption from export customs duties on crude oil, necessitating the re-issue of licences for the Airshagyl and Yelemes Deep structures. The Airshagyl structure will receive a three-year appraisal licence, with a 25-year production licence requiring two further deep wells, while Yelemes Deep receives a two-year appraisal licence, requiring three deep wells to be drilled for a 25-year production licence. During these initial appraisal periods, all production must be sold domestically at domestic prices. The company has invested over $120 million in the BNG Contract Area since 2008, and between 2019 and mid-2025, produced over 4.5 million barrels of oil from shallow structures, which were sold for $88 million in July 2025.
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Introduction
The Board of Caspian Sunrise is pleased to announce significant tax concessions at its flagship BNG Contract Area, necessitating the re-issue of the licences at the Airshagyl and Yelemes Deep structures.
Tax concessions
The Kazakh Ministry of Energy has confirmed significant tax concessions, to assist in the development of the BNG Contract Area's deep structures. Specifically, the Ministry of Energy has confirmed that Alternative Subsoil Use Tax will apply to production from the BNG Contract Area in lieu of Historic Cost, mineral extraction tax and excess profits tax. Furthermore, a temporary exemption from export customs duties on crude oil has been granted.
Re-issue of BNG Contract Area licences
The tax concessions noted above require new licences to be issued. Accordingly, the Ministry for Energy has issued new licences for both the Airshagyl and Yelemes Deep structures on the following bases.
Airshagyl
A three-year appraisal licence has been issued during which the Group must submit credible plans to develop the Airshagyl structure and during which additions to state confirmed reserves on the basis of additional drilling is permitted.
A requirement under the 25-year full production licence expected to be issued during the initial three-year period is for a minimum of two further deep wells on the Airshagyl structure to be drilled after the full production licence is issued.
Yelemes Deep
A two-year appraisal licence has been issued during which additions to state confirmed reserves on the basis of further drilling is permitted.
A requirement during the initial two year period to be eligible for the award of a full 25-year production licence is that three further deep wells each with an expected maximum depth of 5,000 meters are drilled.
Oil sales before the full production licences are issued
During the initial periods of the new Airshagyl and Yelemes Deep licences all production is to be sold on the domestic market and at domestic prices.
BNG Contract Area
The BNG Contract Area is only 40 km from the world class Tengiz field and the Board believes the geology there and also at the nearby world class offshore Kashagan field extends to the BNG Contract Area and beyond that to the Block 8 Contract Area, which is some 160 km further away from the BNG Contract Area and which the Group is in the final stages of acquiring.
The Group holds a 99% interest in the BNG Contract Area. Since 2008 more than $120 million has been spent at the BNG Contract Area, principally to meet the deep structures work programme commitments to be eligible to apply for the 25-year production licences referred to above.
Between 2019 and mid 2025 more than 4.5 million barrels of oil were produced from the shallow MJF and South Yelemes structures, which in July 2025 were sold for a headline cash consideration of $88 million.
Comment
Clive Carver, Chairman said
"The tax concessions are major steps forward for the Group and acknowledge the importance and potential of the BNG Contract Area, which the Board continues to believe is a potentially transformational asset."
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Cleaned text: letterheads, contacts and legal notices removed. View the original announcement ↗ · Company filings. Not investment advice.