KazMunayGas attracts Lukoil to develop fields in Caspian Sea

Kazakhstan’s JSC NC KazMunayGas (KMG) has attracted the Russian company Lukoil to implement the Kalamkas-Sea/Khazar oil and gas project due to the refusal of Shell and Oman Oil to develop these contract areas, Report informs referring to the commentary by Deputy Chairman of the Board of KazMunayGas Kuanysh Kudaibergenov, distributed on April 9 in the company’s Telegram channel.

“The Kalamkas-Sea and Khazar fields were previously part of different subsoil use contracts with various operators. The operator of the Kalamkas-Sea was the North Caspian Operating Company (NCOC, which is developing the Kashagan field), the operator of the Khazar was Caspi Meruerty Operating Company B.V. (CMOC) with the participation of the Shell and Oman Oil companies. For a number of reasons, their development was delayed, including due to the lack of economic feasibility of independent operation. As a result, these companies refused to invest in their development and returned the areas to the state,” notes Kudaibergenov.

Considering the geographic proximity and geological similarity of these deposits, the government decided to combine the two projects into one subsoil use contract. “And after lengthy negotiations, KazMunayGas attracted Lukoil as a strategic partner, which has already implemented a number of similar projects in the Russian sector of the Caspian Sea,” the commentary says.

Kudaibergenov explained that the presence of a strategic partner with appropriate technologies for the development of shelf fields “was the decisive factor thanks to which the project was able to be restarted.”

“Otherwise, the project could still be “on the shelf” waiting for an investor. The project involves investments of about $6.5 billion and belongs to the category of “technologically complex ones,” he noted.

Kudaibergenov also emphasized that KazMunayGas, along with Lukoil, has 50% in this project and all decisions are made on a parity basis between the participants of the joint venture: “Thus, the allegations that KMG has lost control over the project are not true.”