Eni enters Caspian Sea project with KazMunayGas
- Business & Finance
The Kazakh Ministry of Energy, KazMunayGas (KMG), and Italy’s Eni have signed a protocol of direct negotiations to grant the subsoil use right for exploration and production of hydrocarbons within joint operations on Abay, an offshore area in the Kazakhstani sector of the Caspian Sea.
The Abay block is located in the northern part of the Kazakhstan sector of the Caspian Sea, approximately 50 km from the coast in a water depth of less than 10 meters.
The block is estimated to have significant potential for hydrocarbon resources, Eni said on Friday.
Eni and KMG will each hold a 50% share in the Abay block and Eni will carry KazMunayGas’s share of the costs during the exploration period. The block will be operated by the “Isatay Operating Company”, equally owned by Eni and KMG, that also operates the Isatay block.
According to Eni, this is the first case in Kazakhstan where one joint company will operate two projects. The company will benefit from Eni’s proprietary technologies in terms of exploration and reduced “time to market” project’s development, with experience in challenging technical and environmental areas such as the Caspian Basin.
This new project will further expand Eni’s activities in Kazakhstan and consolidate the strategic alliance with KazMunayGas, a key partner for Eni.
Eni has been present in Kazakhstan since the early 1990s. It co-operates the Karachaganak field (FPSA) and is partner in the North Caspian Sea Production Sharing Agreement (NCSPSA) for the giant Kashagan Field.
Together with the national company KazMunayGas, Eni is the joint subsoil user and joint operator of the offshore exploration block Isatay and is currently producing in the country 170 kboed.
Back in June, KazMunayGas and Eni signed a memorandum of cooperation further expanding the relations between two companies. The companies agreed to cooperate in three areas under the signed document: technological cooperation in hydrocarbon exploration and production, including sharing the advanced practices and know-how; explore the potential for co-development of exploration and production projects; implementation of training program for the KMG Group staff.
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