Lukoil, Russia’s largest privately-held oil company, has signed a principles agreement with Kazakhstan’s state-owned oil and gas company KazMunayGas for a project on the Zhenis (Victory) license area in the Kazakh part of the Caspian Sea.
Lukoil said that the president of the company Vagit Alekperov and KazMunayGas management board chairman Sauat Mynbayev signed the agreement in Astana on Tuesday.
According to the agreement, the parties will establish a consortium upon completion of relevant procedures, required for the agreement to enter into force and negotiate with a competent authority of the Republic of Kazakhstan to qualify for exploration and production at the block.
In a separate statement, Mynbayev said: “KazMunayGas and Lukoil have been implementing a number of joint projects as a strategic partner for several years. Today’s agreement, basically, will expand the scope of our cooperation within the framework of joint exploration and production of hydrocarbons in the territory of the Republic of Kazakhstan.”
Zhenis area is located in the Kazakhstani sector of the Caspian Sea, at depths varying from 75 to 100 meters, close to fields with proven hydrocarbon reserves, 80 kilometers offshore and 180 kilometers away from the port of Aktau in Kazakhstan.
“The new Caspian project is an important milestone in terms of sprawling of the company’s resource base in the strategically critical region, where the company has already gained significant competencies,” Lukoil added.
According to Reuters , Lukoil plans to invest $270 million in the Zhenis area. Namely, the company will invest around $60 million in the first stage of prospecting while the second stage of prospecting will entail an investment of around $210 million. Reuters also said that a contract would be signed in autumn and that exploration could begin in 2019.