KazMunaiGas takes dip in North Sea

JSC KazMunaiGas Exploration Production (KMG EP) has agreed to farm into 35% of BG-operated license P1722 in the UK central North Sea, containing the White Bear prospect.

Offshore staff

ASTANA, Kazakhstan -- JSC KazMunaiGas Exploration Production (KMG EP) has agreed to farm into 35% of BG-operated license P1722 in the UK central North Sea, containing the White Bear prospect.

This is the first official venture between the two companies under their upstream co-operation agreement, signed in December 2008.

White Bear is close to BG’s producing Everest and Armada complexes. BG will continue to operate the license on behalf of the partners. There is a commitment outstanding to drill one further exploration well, which should go ahead next year.

KMG EP’s farm-in financial risks, including drilling costs and other project liabilities at the pre-discovery stage, are estimated at $25-30 million.

The agreement was signed in Astana by KMG EP CEO Kenzhebek Ibrashev and Mark Rollins, BG Group senior VP Central Asia and president BG Kazakhstan.

Ibrashev said: “This agreement marks the first entry of KMG EP into international operations (outside) Kazakhstan. It follows our strategic aims of developing a selected portfolio of quality exploration and production assets, not only within Kazakhstan, which we are continuing to do, but internationally.

“It also provides us with access to BG Group’s offshore skills, techniques and experience which is important to our mid- and longer-term development and to our future expansion of exploration and production activity into the offshore Caspian Sea. We will continue our efforts abroad while maintaining our focus on delivering enhanced performance from our core assets and associate interests within Kazakhstan.”

09/01/2010

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