KMG, Equinor form exploration pact

Norway’s Equinor has agreed with Kazakhstan’s state-run KazMunayGas (KMG) on the joint study of Kazakh oil and gas blocks.

The research agreement was signed as part of the pair’s broader long-term co-operation, KMG said on September 24, without divulging details of projects they intended to study.

“We can confirm the mentioned agreement and the intention is to carry out geological and geophysical studies to evaluate hydrocarbon potential,” an Equinor representative told NGW. “The areas included in the study are in the Caspian Sea and in onshore areas”.

Equinor had been in talks to explore the Abay block in Kazakhstan’s northern Caspian zone, signing a heads of agreement (HoA) with KMG on the project in 2011. But it pulled out of the venture in 2013, and KMG is now courting Italy’s Eni to help develop Abay.

Kazakhstan has offered a number of Caspian blocks to investors over the years, but so far it has only managed to bring one offshore project into production, the troubled Kashagan oilfield, which came online in late 2016. In April, however, KMG concluded an exploration and development contract with Russia’s Lukoil for the Zhenis block in the southern Caspian. The pair aim to finalise a similar agreement at the nearby I-P-2 block.

KMG has signed an additional joint research agreement with Lukoil, the two companies said in a statement on September 20. Lukoil told NGW that these studies would also take place in Kazakhstan’s southern waters.

Lukoil and KMG are already partnered at a number of large-scale projects in Kazakhstan, including the Karachaganak, Tengiz and Kumkol oil and gas fields, as well as the Caspian Pipeline Consortium (CPC), used to pump Kazakh crude to European markets.