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ONGC Videsh Ltd (OVL) has signed definitive agreements with KazMunaiGas (KMG), the national oil company of Kazakhstan, for acquiring a 25 per cent participating interest in the Satpayev exploration block. With this the company has marked its entry in the Kazakhstan hydrocarbon sector.
Seven pacts
This agreement was one of the seven initialled between India and Kazakhstan in Astana during the Prime Minister, Dr Manmohan Singh's ongoing visit there. The other agreements include cooperation in the civil nuclear field, agriculture, cyber security and healthcare.
The Satpayev exploration block is situated in a highly prospective region of North Caspian Sea. The block contains two prospective structures with 256 million tonnes in estimated hydrocarbon resources. OVL has already got the Cabinet's approval to invest $400 million in the block.
The package of three agreements signed between OVL and KMG apart from the participating share assignment agreement, include carry agreement and joint operating agreement. Carry agreement spells out that OVL can sell any discovery in Satpayev Block locally and use cash generated from such transaction for purchases elsewhere. This is mainly because there is no means to transport oil from Kazakhstan to India.
A Joint Operating Agreement on running the exploration block was also signed by OVL and KMG. Kazakhstan is important for world energy markets because it has significant oil and natural gas reserves.
Nuclear ties
A joint statement issued later said that the agreement on atomic energy envisages a legal framework for mutually beneficial cooperation between the two sides in peaceful uses of nuclear energy. These include fuel supply, nuclear medicine, reactor safety mechanism, exploration and joint mining of uranium, design construction and operation of nuclear plants.
Agencies also quoted the Kazakh President announcing that his country was ready to supply India with 2,100 tonnes of Uranium.
The agreement between Ministries of Agriculture is for cooperation in agricultural research and technologies, food and agriculture production.
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