Russia’s Rosneft has quit Eurasia, an early-stage oil exploration project in Kazakhstan, while Shell has joined it, an executive of the Kazakh company involved in the project said May 21.
The Eurasia project focuses on exploring a geological area known as the Caspian Depression in western Kazakhstan by drilling ultra-deep wells of up to 15 km.
Kazakhstan has estimated that the untapped lower levels of the geological structure could hold up to 60 billion tonnes of oil. The initial stage of exploration, including the drilling of the first well, could cost $500 million.
Six companies, including Kazakh national energy firm KazMunayGaz, Azerbaijan’s SOCAR, Italy’s ENI, China’s CNPC and U.S. geological services group NEOS, signed up for the project last year.
But Rosneft, which also signed the memorandum, told the Kazakh government it was quitting the project, Alexander Denyakin, chief executive of KMG-Eurasia, a subsidiary of KazMunayGaz, told Reuters.
Rosneft declined to comment on the matter on May 21.
At the same time, Shell is joining the project, which will remain open to new participants until the end of this year, Denyakin said. Shell's Kazakh office could not be reached for comment on May 21.
Due to its technological complexity Eurasia could cost more than Kashagan, a giant offshore field in the Caspian on which investors have spent over $50 billion.
Egypt expects investments of at least $750 million to $800 million in the first stage of exploration in the 12 concessions, Petroleum Minister Tarek El Molla said during a press conference.
The company also said it expects to generate substantial free cash flow in 2018, allowing it to initiate a dividend in the first-quarter of 2019.
Production from Egypt’s Giza and Fayoum gas fields, part of BP’s West Nile Delta Development, will jump to 700 million cubic feet per day (MMcf/d) by April as the country returns to gas export markets, its petroleum minister said on Feb. 11.