KMG EP and BG Group have reached an agreement to jointly explore the White Bear prospect in the UK North Sea

JSC “KazMunaiGas Exploration Production” (KMG EP) and BG Group plc (BG Group) today announced the signing of an agreement to farm-in into a BG Group operated licence in the United Kingdom Central North Sea – the production licence (P1722) which contains the White Bear prospect. KMG EP is acquiring a 35% interest in the licence.

The agreement, which was signed today in Astana by KMG EP Chief Executive Officer Mr. Kenzhebek Ibrashev and BG Group Senior Vice President Central Asia and President BG Kazakhstan, Mark Rollins marks the first official venture between KMG EP and BG Group under the terms and conditions of the Upstream Co-operation agreement signed in December 2008.

The White Bear prospect, within the P1722 licence, is located close to the BG Group’s existing Everest and Armada producing assets. BG will retain the remaining interests and will continue to operate the licence on behalf of the partners. The licence carries an outstanding commitment to drill one further exploration well and the partners plan to drill this well in 2011.

The transfer of an interest meets terms and conditions of the cooperation agreement signed in 2008. KMG EP farm-in financial risks including drilling costs and other project liabilities at the HC pre-discovery stage are estimated at USD 25-30 million. KMG EP’s economical evaluation of the project followed the corporate investment criteria reflecting the cost of capital and risks associated with this type of projects.

© Eurasian chemical market, 2005-2012