GROUP INKS PACT TO EXPLORE KAZAKH CASPIAN SEA
Eight major integrated petroleum companies have signed an agreement forming a group to conduct an exploration program in Kazakhstan's portion of the Caspian Sea.
Group member Mobil Corp. said the agreement includes a major geophysical study that will be carried out through 1996. After that, group members will be eligible to select blocks for drilling and development in a 103,000 sq km area. The remaining area then will be made available for open licensing to other companies.
Initial plans include investigating environmental conditions in the area and research into the safest methods of exploring and developing reserves,
The northern Caspian is prime spawning ground for caviar producing sturgeon, a critical export industry for the former Soviet republic.
The accord, which formalizes the group's relationship with the Kazakh government, follows an earlier agreement in June that set out details of a $200 million work program (OGJ, June 14, p. 18).
No deadline has been set for award of negotiating rights, though the group companies are believed to be hoping for a more concrete agreement in late January 1994.
Group members are operator Kazakhstancaspishelf (KCS), Agip SpA, British Gas Exploration & Production Ltd., a combine of BP Kazakhstan Ltd. and Norway's Den norske stats oljeselskap AS, Mobil Oil Kazakhstan Inc., Shell Exploration Development BV, and Total Exploration Production Kazakhstan.
KCS is the state oil company responsible for oil and gas development in the Kazakh sector of the Caspian Sea and will serve as group operator. It has a long term program to transform itself into an independent oil company through cooperation and support of the foreign companies in the group, which will provide training for KCS staff and other organizations.
Chase Manhattan Bank N.A., Mercator Corp., and Shearman & Sterling advised the Kazkah government on the agreement.
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