ONGC Videsh Ltd (OVL), the overseas arm of state-run Oil and Natural Gas Corp, has acquired a 25-per cent stake in the Satpayev exploration block in Kazakhstan in the Caspian Sea, marking its first acquisition in the hydrocarbons-rich acreage in Central Asia.
A tripartite agreement was signed yesterday in Astana, Kazakhstan between OVL, the Ministry of Oil and Gas of Kazakhstan and the state-owned national oil company KazMunaiGaz (KMG).
The Satpayev exploration block is located in close proximity to major discoveries in the highly prospective North Caspian Sea and covers an area of 1,482 sq km and is at a water depth of 6-8 metres.
In 2005, ONGC and KazMunaiGaz entered into a memorandum of understanding to jointly explore energy assets in Kazakhstan. OVL will hold a 25-per cent stake in Satpayev, while KazMunaiGaz will hold the remaining 75 per cent.
OVL has the option to raise its stake to 35 per cent upon commercial discovery.
The Satpayev exploration block, which contains two prospective structures, namely Satpayev and Satpayev Vostochni (East), is estimated to hold 1.85 billion barrels of crude oil reserves and can produce close to 300,000 barrels per day.