China's CNOOC, Kazakh Energy Ministry, KMG sign oil exploration deal for Caspian Zhylyoi project

ASTANA. June 24 (Interfax) - The Kazakh Energy Ministry, national oil and gas company KazMunayGas (KMG) and CNOOC Hong Kong Holding Limited, a subsidiary of China National Offshore Oil Corporation (CNOOC Limited), have signed a contract for the exploration and production of hydrocarbons as part of the Zhylyoi project, KMG's press service said.

The agreement on the Zhylyoi project, located in the transit zone of the northeastern Caspian Sea, was signed by Deputy Energy Minister Kudaibergen Arymbek, KMG First Deputy Chairman Kurmangazy Iskaziyev and CNOOC Limited Vice President Liu Yongjie on behalf of CNOOC Hong Kong Holding Limited.

"The partnership entails a 50-50 joint implementation of the Zhylyoi project, with CNOOC financing the exploration phase," the press service said.

The minimum work program under the contract includes conducting 3D seismic surveys across an area of 400 square kilometers, along with the reprocessing of 400 line kilometers of legacy 2D seismic data. The agreement also entails drilling a pre-salt exploration well (independent phase) to a depth of 2 kilometers, followed by a subsalt exploration well (dependent phase) reaching 4.5 kilometers, subject to the findings of the 3D seismic analysis.

"This marks CNOOC's first investment in Kazakhstan, starting with an exploration project," KMG said.

As reported, KMG and CNOOC agreed on the terms for the Zhylyoi project in late April.

KazMunayGas is Kazakhstan's national operator for hydrocarbon exploration, production, refining and transportation, representing state interests in the oil and gas sector.

CNOOC, a global energy leader, specializes in offshore exploration and production and is involved in major projects across more than 20 countries.