The Kazakh Ministry of Energy, national company KazMunayGas (KMG) and Eni signed a protocol of direct negotiations to grant the subsoil use right for exploration and production of hydrocarbons within joint operations on Abay, an offshore area in the Kazakhstani sector of the Caspian Sea, the Italian supermajor announced in a press release on Friday.
The Abay block is located in the northern part of the Kazakhstan sector of the Caspian Sea, approximately 50 kilometers from the coast in a water depth of less than 10 meters. The block is estimated to have significant potential for hydrocarbon resources, Eni said.
In March 2019 KMG and Eni signed the joint operating agreement and a financing agreement as part of the joint implementation of the Abay area project.
Under the agreement signed this week, Eni and KMG will each hold a 50% share in the Abay block and Eni will carry KMG’s share of the costs during the exploration period. The block will be operated by the Isatay Operating Company, equally owned by Eni and KMG, that also operates the Isatay block.
This is said to be the first case in Kazakhstan where one joint company will operate two projects.
The next stage of cooperation will be the signing of the Abay area hydrocarbons exploration and production contract.