MOSCOW – ITERA Oil and Gas and OJSC Zarubezhneft have signed a joint operation agreement for a production sharing agreement (PSA) in the Turkmen sector of the Caspian Sea.
The companies entered into the PSA for block 21 with the government Agency on Control and Usage of Hydrocarbon Resources under the President of Turkmenistan in September 2009.
This new agreement sets forth the procedures that the parties will follow to jointly implement exploration, development, construction, and operation of any discovered fields in the block. Investments could amount to up to $6 billion.
OJSC Zarubezhneft will act as the project operator and will be authorized to perform all oil operations under the PSA on behalf of contracting companies.
The parties also signed an agreement establishing the procedure and terms of transfer of a 51% interest in the project to OJSC Zarubezhneft. ITERA will hold the remaining 49%.
According to ITERA, block 21 is thought to hold recoverable oil reserves of 219 MMtons (1.6 Bbbl), 92 bcm (3.5 tcf) of associated gas, and 100 bcm of natural gas.