Lukoil is aiming to expand its footprint in Kazakhstan Caspian Sea waters, with the Russian company and KazMunaiGaz (KMG) nearing a joint venture on exploration and development of the Al-Farabi block.
The announcement came after the visit of Lukoil president Vagit Alekperov to the Kazakh capital of Nur-Sultan earlier this week.
Both companies are now preparing for the completion of the deal, with Kazakh state player KMG set to hold just over 50% in the venture and Lukoil the remainder.
The Al-Farabi block — previously known as I-P-2 — spans about 6000 square kilometres and is located between 100 kilometres and 130 kilometres from the Kazakh shore.
KMG also said Lukoil has “expressed interest towards participating in the Kalamkas-more and Khazar blocks. That demonstrates attractiveness of these tracts to investors”.
Late last week, local reports accused KMG of procrastination and bureaucracy in talks with BP over the UK supermajor's expected entry to three offshore blocks in Kazakhstan, including Kalamkas-more and Khazar.
In response, KMG posted a copy of a BP’s letter informing the Kazakh company of a decision to halt negotiations on the acreage because it has focused more on renewable energy sources.
Lukoil has already signed three offshore joint ventures with KMG. The Russian company holds 50% stakes in the Zhenis and Khvalynskoye tracts and a 25% shareholding in the Tsentralny block.
Lukoil also holds a stake of almost 13% in the Caspian Pipeline Consortium, a main oil export pipeline route for internationally owned development projects in Kazakhstan.
The Russian producer already operates two oil and gas fields in the Russian sector of the Caspian Sea, where it is preparing to bring online a third asset.