China National Petroleum Corporation (CNPC) is progressing with plans to explore a hydrocarbon block in Kazakhstan after agreeing an initial deal with a Kazakh partner earlier this year.
The initial agreement included CNPC subsidiary CNPC-Aktobemunaygaz financing all costs during the project’s exploration phase.
Following a visit to Beijing this week, Qazaqgaz said on Thursday that the two have now signed a final joint partnership agreement, adding that CNPC-Aktobemunaygaz also inked a deal to provide the financing for collection of seismic data and to drill at least one deep exploration well on the block.
According to the Kazakh company, CNPC will fully finance all costs during the exploration and preparation phase until the block is put into commercial production.
CNPC-Aktobemunaygaz already operates several oil and gas fields in the Aktyubinsk region, including the major Kenkiyak and Zhanazhol assets. The Chinese company is also exploring neighbouring areas for potential hydrocarbons to maintain the production level in long-term.
Authorities in Astana hope that output from Severny-1 will predominantly be natural gas, rather than oil, in order to meet growing domestic demand for gas.
The block has a common border with two fields — Bulashskoye and Bozoba — where previous exploration efforts identified oil and gas reserves at depths between 5000 metres and 6200 metres.
Qazaqgaz executive board chairman Alibek Zhamauov said that Severny-1 is “an important element in growing gas reserves in the country. The agreements will allow [us] to start the works quickly and also bring the latest technical achievements into the exploration phase”.
Authorities in Astana have been unhappy with the progress of two Western-led developments, Kashagan and Karachaganak.
