Source: KazMunaiGas Exploration Production
JSC KazMunaiGas Exploration Production and BG Group signed an agreement to farm-in into a BG Group operated license in the United Kingdom Central North Sea. KMG is acquiring a 35 percent interest in production license P1722, which contains the White Bear prospect.
The White Bear prospect, within the P1722 license, is located close to the BG Group's existing Everest and Armada producing assets. BG will retain the remaining interests and will continue to operate the license on behalf of the partners. The license carries an outstanding commitment to drill one further exploration well and the partners plan to drill this well in 2011.
The transfer of an interest meets terms and conditions of the cooperation agreement signed in 2008. KMG EP farm-in financial risks including drilling costs and other project liabilities at the HC pre-discovery stage are estimated at USD 25-30 million. KMG EP's economical evaluation of the project followed the corporate investment criteria reflecting the cost of capital and risks associated with this type of projects.
"This agreement marks the first entry of KMG EP into international operations outside Kazakhstan,” said KMG EP CEO Kenzhebek Ibrashev. “It also provides us with access to BG Group's offshore skills, techniques and experience which is important to our mid and longer-term development and to our future expansion of exploration and production activity into the offshore Caspian Sea."