Russia's Itera and Zarubehzneft have signed a Caspian production sharing agreement with Turkmenistan for exploring the country's offshore Caspian sector for oil and natural gas.
Itera general director Vladimir Makeyev and Zarubezhneft CEO Nikolai Brunich signed a production-sharing agreement to develop jointly the 21st block of Turkmenistan's sector of the Caspian.
The production sharing agreement stipulates that Zarubezhneft is the project operator and is authorized to do all the oil-production work under the PSA on behalf of the contracting companies, The Moscow Times reported.
Initial estimates by Itera and Zarubehzneft put Block 21's recoverable oil resources at 219 million tons, associated gas at 92 billion cubic meters, and natural gas at 100 billion cubic meters, with eventual investment in the project being up to $6 billion.
According to the PSA, which follows on from a September 2009 agreement signed between Itera and Turkmenistan's presidential state agency a 51 percent stake in the project will be transferred to Zarubezhneft, with Itera retaining the remaining 49 percent.
The PSA build on a decade-long effort by Itera and Zarubezhneft, which in 2001 signed an agreement with the Turkmen government regarding their intent to participate in the development of Turkmenistan's oil and gas sector.
By. Charles Kennedy, Deputy Editor OilPrice.com
Charles is a writer for Oilprice.com More