Press releases – 2007

Joint venture agreement signed in Aksai

19 Nov 2007

Chagala Group Limited, the specialist Kazakh real estate developer and operator listed on the London Stock Exchange, today announces that it has signed a joint venture agreement with Maverick, a company based in the town of Aksai in the West of Kazakhstan, to renovate, own and operate an accommodation and recreational facility in the centre of the town.

Chagala will take a majority holding of 50.1% of the venture and will manage the day-to-day operations. The venture will comprise of 150 apartments, a mess hall, a laundry and an Irish pub. The venture will also own a four hectare green-field site located close to the existing facility which will be held for future development.

Aksai is the home town for the Karachaganak gas condensate field, one of the largest fields of its type in the world. The operating consortium behind the project is the Karachaganak Petroleum Operating ("KPO"), and consists of BG Group, Eni, Chevron and LUKOIL. KPO is currently lining-up the third phase of the field development; starting towards the end of next year and continuing until 2015. As part of this it will be spending over US$12 billion and the number of people required to execute the project will run into tens of thousands. Phase 2 required a total workforce of close to 20,000.

Chagala is ready to commence work next month and expect to be fully operational during the second half of 2008.

Tim Abson, Chief Executive of Chagala Group, commenting on the joint venture, said:

"We are delighted to have signed this exciting joint venture with Maverick. Karachaganak is a site of international and domestic importance and requires a substantial workforce to operate this. We look forward to providing KPO and its contractors with the market leading service that our clients have come to expect from Chagala.

"This joint venture also serves as a clear illustration of Chagala’s commitment to provide a full and comprehensive range of services and products to the oil and gas industry in Kazakhstan and we look forward to showing continuing progress in this area into, and throughout, 2008."

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Notes to Editors

• Chagala's shares in the form of global depositary receipts started trading on the main market of the London Stock Exchange plc on the 27th of February 2007
• Chagala, formed in 1994, is the leading real estate developer in West Kazakhstan exploiting real estate development opportunities related to the emerging offshore oil and gas industry in the region.
• The first facility was opened in 1995 in the city of Atyrau on the Caspian Sea and, to date, Atyrau has been the prime area of activity.
• The Company is expanding in centres of oil and gas operations in West Kazakhstan namely: Atyrau, the administrative centre for Kazakhstan's oil & gas industry, Bautino, the supply base for the off-shore oil industry; Aktau, a major Kazakh sea port with oil-loading facilities; and Uralsk, the regional centre connected with the Karachaganak gas field, one of the biggest gas condensate fields in the world.
• The diversified property portfolio includes: a chain of three star hotels catering to businessmen working in the rapidly expanding energy sector, fully-serviced, high quality apartments, a range of stand alone food and beverage outlets, office buildings complying with international standards and a sizeable portfolio of land in strategic locations for future development
• Chagala has a high name recognition in the region as a quality brand and has a record of achieving consistently high occupancy rates from its property portfolio
• The Group has ownership of a sizeable, diverse and well-located land bank acquired at competitive prices with excellent development potential