The Hindu Business Line : Kazakh co, OVL to finalise deal on Satpayev block

Kazakhstan's national oil and gas company, KazMunaiGaz (KMG), and ONGC Videsh Ltd (OVL), the overseas arm of ONGC, are likely to shortly finalise the deal for the Satpayev block in Caspian Sea. The two companies are also likely to work out a detailed timetable for entering into definitive agreements on the project, a senior official told Business Line.

This will be India's first venture in Kazakhstan, which is one of Central Asia's largest producers of oil and gas. At a recent India-Kazakhstan joint working group (JWG) meeting on cooperation in the hydrocarbons sector, it was recommended that the two companies would expedite negotiation process on the project.

Preferred block

Following the decisions of the earlier JWG (2005), OVL and KMG had undertaken a joint study of two blocks of the Kazakhstan part of the Caspian Sea — Satpayev and Makhambet. Satpayev had emerged as the preferred block for joint development.

As per reports, initially the Kazhaks had offered India 50 per cent stake in the Satpayev block on nomination basis, but indications are that KMG is now offering only a minority stake to the joint venture of ONGC and LN Mittal, ONGC Mittal Energy Ltd (OMEL). OVL had roped in Mittals, who have a big presence in that country, for buying stake in Satpayev block in Kazakhastan. The official said that all issues concerning the participation was likely to be sorted out shortly, as the two commercial entities have been given a time line to work out the modalities.

The two countries, at the recent JWG meeting, also agreed upon enlarging cooperation between OVL and KMG.

Petro investments

Besides, the Kazakh side also agreed to consider the possibility of Indian investments in the petrochemicals sector of that country. It was decided that the Kazakh side would present a master plan for the development of petrochemical industry to India for further discussions.

Prospective projects

Asked whether there were any deliberations on participation in the refining sector, the official said that it was conveyed to Kazakhstan that India was keen to learn about the refinery modernisation projects executed in that country. It was agreed that Indian Oil Corporation and KMG would interact on the issue.

As regards development of various transport routes for Kazakh oil and gas towards north, east and west, it was felt that the North South Energy corridor study could form the basis of further joint work in this director, the official added.

It was also recommended that KMG/ KazTransGaz and GAIL (India) Ltd would carry out consultations on prospective projects of cooperation in gas sector, pipelines and long-term projects in India, Kazakhstan and third-world countries.

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