Rosneft And Zarubenefte To Work On Kazakh Kurmangazy Field

The Russian government has granted Rosneft and Zarubejneft the right to develop jointly with Kazakhstan the Kurmangazy field. It is estimated that Kurmangazy may yield as much as Kazakhstan's Kashagan, which recently became the world's biggest oil find over the last 30 years after its Agip confirmed its huge reserves in June. The government's decision is a big disappointment for Russia's largest oil producer Lukoil.

Russia and Kazakhstan have recently agreed to divide their sectors of the land-locked Caspian Sea and jointly work on disputed oilfields, including Kurmangazy in the Kazakh sector and two fields in the Russian sector explored by Lukoil. The Russian giant hoped to enter Kurmangazy in exchange for ceding 50 percent in its projects to Kazakhstan under an agreement between the two states. The government said in a statement Rosneft would become the operator of the Russian stake in Kurmangazy, or 50 percent of the field, but might cede 25 percent to Zarubejneft in the future. Rosneft and Zarubejneft already represent Russia in all production sharing agreements on its territory.

Kazakh President Nursultan Nazarbayev has said Kurmangazy could be second in terms of oil reserves only to the nearby Kashagan. Agip said in June Kashagan held between seven and nine billion barrels of crude in proven reserves, and up to 38 billion barrels in probable reserves. By comparison, Alaska's Prudhoe Bay initial proven reserves stood at 8.6 billion barrels and have since been upgraded to 13 billion. Kazakhstan plans to keep 25 percent in Kurmangazy and offer 25 percent to a foreign partner to help explore it. Industry sources say the Kazakh government is in talks with almost all Western oil giants over Kurmangazy with TotalFinaElf showing the biggest interest.

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