7 June 2019, Lukoil and KazMunayGaz (KMG) have signed Heads of Agreement on the I-R-2 block located in the Kazakh Sector of the Caspian Sea. The Heads of Agreement calls for the parties to hold negotiations to obtain mineral rights for the block. At the next stage the parties will conclude a contract for hydrocarbon exploration and production and establish a joint venture in charge of operations in the block.  Block I-R-2 lies offshore Mangyshlak-Central Caspian Basin, immediately east of the Tsentralnoye offshore field. Currently there are no discoveries in the I-R-2Â  block.  Background Information  Water depth within the I-R-2 block vary between 300 and 400 m. The distance to the shore is 130 km. The nearest port, Aktau, is 130 km from the block. Several 2D seismic surveys covering the block were acquired in previous years.  In April 2019, Lukoil, the Ministry of Energy of Kazakhstan and KMG concluded a contract for the exploration and development of hydrocarbons in the offshore Zhenis block situated in the same basin as I-R-2. In accordance with the contract, the main minimum work obligations include a 3D seismic survey and drilling one exploration well. There are no discoveries in this block either. Zhenis Operating LLP (a 50/50% joint venture) is the project operator.  The Tsentralnoye field is shared by Kazakhstan and Russia. The Russian part in the Tsentralnoye project is represented by Lukoil and Gazprom. The fieldâs 3P recoverable reserves are estimated at 664 MMbbl of oil, 1.7 Tcf of gas (mainly gas-cap) and 20 MMbbl of condensate in Upper Jurassic clastics.   Kazakhstan does not hold offshore bidding rounds, and several blocks off Kazakhstan are available for direct negotiations with the government/national oil company KMG. Kazakhstan legislation stipulates that KMG must have at least 50% interest in offshore projects.  Lukoil has been involved in Kazakhstanâs E&P for a long period of time, both on- and offshore. However, its previous exploration projects in the countryâs Caspian sector have been unsuccessful. The company has drilled dry wells in the Tyub-Karagan and Atash blocks, and has had to relinquish the Zhambay block due to unavailability of a drilling rig capable of operating in the blockâs super-shallow waters at that time. All these blocks were in the Northern Caspian, while Zhenis and I-R-2 are in the Central Caspian. The company has made several important oil and gas/condensate discoveries in the Russian sector of the Caspian, while its previous exploration effort in the Kazakh sector has been unsuccessful.
Lukoil and KMG have signed HOA on the I-R-2 block lies offshore Mangyshlak, immediately east of the Tsentralnoye offshore field, WD vary between 300 and 400 m. The distance to the shore is 130 km. Several 2D seismic surveys covering the block were acquired in previous years.