Oil Diplomacy Editor
LOS ANGELES, Dec. 11 -- Kazakhstan's state-owned KazMunaiGas will begin commercial production in 7-8 years from the N Block in the Caspian Sea 30 km off Aktau, according to a senior company official.
"We plan to launch commercial production in 2016 if all current hydrocarbon reserve estimates are confirmed," said KMG Chief Executive Officer Kairgeldy Kabyldin, following the signing of a memorandum of understanding with ConocoPhillips and Mubadala Development Co.
Kabyldin said the 8,100-sq-km N Block holds 630 million tonnes of oil equivalent, with reserves estimated at 270 million tonnes. He said it was too early to specify the levels of future commercial production on the block.
ConocoPhillips and Mubadala will finance exploration costs and pay Kazakhstan a $100 million signature bonus to secure rights to explore the block, said Kabyldin.
KMG, ConocoPhillips, and Mubadala expect to finalize the agreement in January. Under the MOU, ConocoPhillips and Mubadala will jointly hold a 49% stake in the N Block, with KMG holding the remaining 51%.
Contact Eric Watkins at email@example.com.