MOL & KMG Join Forces on Karpovskiy Severniy Block

MOL and KazMunaiGas are set to join forces on the Kazakh Karpovskiy Severniy block following the farm-in of MOL into the prospect. 

The deal, which was announced today by Kazakhstan's national gas company KazMunaiGas (KMG), sees Hungarian company MOL take a 49 per cent in the 1,670 square kilometre block through the acquisition of shares in Karpovskiy Severniy JSC. Following the acquisition of these shares, KMG and MOL will form a joint venture to explore. KMG also says that MOL will assume half the financial and exploration risks of the block as part of the joint venture.

The Karpovskiy Severniy block, which has previously been explored, with a working hydrocarbon system already discovered, a statement from KMG said today.

"The area is extensively covered by seismic data and information gathered from numerous wells proves the presence of a working hydrocarbon system," the statement read. "[A] remaining, planned work programme includes the drilling of two deep pre-salt exploration wells along with minor seismic acquisition."

Additionally, the block is located 40 kilometres from the Fedorovskiy block, where MOL and KMG had previous success in a gas-condensate discovery in 2008. KMG holds a 50 per cent stake in the Fedorovskiy block with MOL holding a 27.5 per cent stake. 

In its statement today, KMG said that there may be potential for "operational synergies" between the two blocks.Additionally, the company said the expertise of companies such as MOL would aid KazMunaiGas's development and growth.

"The sale of 49 per cent of subsoil use rights on the Karpovskiy Severniy exploration block is in line with our strategy to form strategic partnerships with international oil companies which have good operating experience and good exploration records," CEO of KMG Alik Aidarbayev said. "Exploration activities on perspective blocks will result in the growth of resources of KMG EP."