Russian oil and gas company Lukoil and Kazakhstan's state-owned energy company KazMunayGas (KMG) signed an agreement on future obligations in the Al-Farabi project in the Kazakh sector of the Caspian Sea, the Russian company announced on Thursday.
The deal, signed by Lukoil President Vagit Alekperov and Chairman of KMG Alik Aidarbayev, defines the rights and obligations of the companies as future license holders of the project, according to Lukoil's statement.
"This is a next step after the principles agreement, concluded in June of 2019. The parties intend to proceed with signing a contract on exploration and production of hydrocarbons that will come into force as soon as KMG receives the license and the parties close the deal to establish a joint venture with 50.01% (KMG) and 49.99% (Lukoil) shares," the statement read.
The Al-Farabi license block is located in the Kazakh sector of the Caspian Sea, 100-130 kilometers away from the shore at water depths of 150-500 meters. The license block covers an area of over six thousand square kilometers, which remain ice-free all year round.
The companies are currently partners in Karachaganak, Tengiz and Kumkol projects, as well as in the Caspian Pipeline Consortium oil transportation project.
On April 1, 2019, Kazakhstan's ministry, KMG and Lukoil signed an agreement to explore and produce hydrocarbons at the Zhenis offshore block, in the Caspian Sea offshore Kazakhstan.
By Firdevs Yuksel