LUKOIL Signs Production-sharing Agreement on Karachaganak Field in Kazakhstan

abarrelfullabarrelfull wrote on 11 May 2012 12:55

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19 November, 1997. - Vagit Alekperov, president of LUKOIL, and top executives from British Gas Exploration and Production Ltd., Agip S.p.A. and Texaco International Petroleum in Washington November 18 signed a Final Agreement on production-sharing for the development of the Karachaganak gas condensate field in Kazakhstan.

The 40-year agreement, signed in the presence of U.S. Vice President Al Gore, Kazakh President Nursultan Nazarbayev, estimates for investment of about $6 billion.

According to the agreement, LUKOIL would own a 15%-interest, assigned by Gazprom, in the project; Texaco would own 20% and Agip and British Gas would each own 32.5%.

The Karachaganak field, close to the city of Aksaj in north-west Kazakhstan, was discovered in 1979. It contains recoverable reserves of 300 million tonnes of oil and gas condensate and 500 billion cubic meters of natural gas. The consortium plans initially to produce 3.6 million tonnes of oil and condensate annually, rising to 8 million tonnes, and then 12 million tonnes after the year 2001. Around 6 million tonnes of hydrocarbons will be transported by the Caspian pipeline when it opens at the end of 2000.

"We think that our participation in the project will serve to strengthen ties between Russia and Kazakhstan, and will bring both countries considerable economic benefit," Vagit Alekperov, the LUKOIL president, said. Alekperov underlined also that the project would extend Lukoil's mineral-resource base and make it more competitive.

LUKOIL, via joint venture with Atlantic Richfield company (USA), owns a 12.5%-stake in the Caspian Pipeline Consortium, and owns a 5%-interest in a consortium to develop the Tengiz oilfield in Kazakhstan.

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