Russian oil and gas company Lukoil and Kazakhstan’s state-owned company KazMunayGas (KMG) have signed an agreement for future obligations on the Al-Farabi Project in the Kazakh Sector of the Caspian Sea.
The agreement between the two companies was signed by Lukoil President Vagit Alekperov and the chairman of the management board of KazMunayGas Alik Aidarbayev .
Lukoil said on Thursday that the agreement defines rights and obligations of both companies as future license holders under the project.
According to the company, this is a next step after the agreement in principle , 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 in which KMG will hold 50.01 per cent while the remaining 49.99 per cent will go to Lukoil.
Apart from this agreement, Lukoil and KMG are partners in other major projects like Karachaganak, Tengiz, Kumkol, and in oil transportation project of Caspian Pipeline Consortium.
Also, the Ministry of Energy of the Republic of Kazakhstan, KMG and Lukoil signed an agreement to explore and produce hydrocarbons at Zhenis offshore block on 1 April 2019.
As for the Al-Farabi license block, previously named I-P-2 license block, is located in the Kazakh Sector of the Caspian Sea, 100 – 130 kilometres away from shore in a water depth of 150-500 meters.
The license block covers over six thousand square kilometres. The water zone remains ice-free all year round.