New Delhi: State-owned Oil and Natural Gas Corp (ONGC) will sign an agreement for taking the 25% stake in Kazakhstan’s Satpayev oil field by end of February 2011, oil secretary S Sundareshan said Monday.
“Nuts and bolt of the agreement are been discussed it is in the final stages of finalisation and we hope to signed it before the end of February 2011,” he said.
Sundareshan was speaking after a meeting of Indo-Kazakhstan inter-governmental commission here.
Kazakhstan oil and gas minister Sauat Mynbayev said “India is a very important partner for Kazakhstan. Though there were some issue, the agreement (exploration and production) contract will be signed by end of February.”
Mynbayev lead the Caspian nation at the inter- governmental talks while the Indian side will be led by petroleum minister Murli Deora at the day long talks.
ONGC Videsh Ltd, the overseas arm of the state-run firm, is to invest about $400 million in the prospective Satpayev oilfield in the Caspian Sea.
Satpayev is situated in highly prospective region of North Caspian Sea and in proximity to at least four fields.
A peak output of 287,000 barrels per day (14.3 million tonnes a year) is envisaged from the 256 million tonnes of reserves in the field.
Kazakh national oil firm KazMunaiGas will be the operator of the field, holding remaining 75% stake.
The initial agreement for OVL and its partner Mittal Investment Sarl (holding firm of steel magnate Lakhsmi Mittal) getting 25% stake in the Satpayev was signed during Kazakhstan President Nursultan Nazarbayev’s state visit in January 2009 and a EPC has been under discussion since then.
But in November 2009, Mittal pulled out of the project and OVL decided to take the entire 25% stake on its own.
A top official said OVL will pay $26 million as signing amount to the Kazakhstan government.
Besides, it will also pay $80 million as one-time assignment fee.
On top of this, OVL has committed a minimum exploration investment of $165 million and an additional optional expenditure of $235 million.
The 1,582 sq km Satpayev block, situated in the Pre- Caspian Basin of Kazakhstan, holds 1.75 billion barrel of in place oil reserves.
It lies in proximity to major fields like Karazhanbas, Kalamkas, Kashagan and Donga, where significant amounts of oil has been discovered.
The Satpayev field was originally identified for OVL but in 2007 the allocation was given to ONGC-Mittal Energy Ltd - the equal joint venture of OVL and Mittal Investment.
But just when the Exploration and Production Contract (EPC) deliberations were being concluded, Mittal pulled out of the project.