press release

Texaco Press Release - Production Agreement Concluded For Giant Karachaganak Oil And Gas Field

Kazakhstan President Nazarbayev Participates in Ceremony With Texaco, Agip, BG and Lukoil During Visit to United States

FOR IMMEDIATE RELEASE: TUESDAY, NOVEMBER 18, 1997.

WASHINGTON, D.C., Nov. 18 - Texaco, Agip S.p.A., BG Exploration and Production Limited and Lukoil today signed the production sharing agreement for Kazakhstan's giant Karachaganak oil and gas condensate field at a U.S. State Department ceremony attended by the President of Kazakhstan, His Excellency Nursultan Nazarbayev, and Vice President Al Gore.

The signing took place in Washington during President Nazarbayev's visit to the United States and concludes five years of negotiation. One of the largest gas condensate fields in the world, Karachaganak currently sells an average 50,000 barrels of condensate and 250 million standard cubic feet of gas per day. Texaco's potential share of total recoverable reserves over the 40-year contract period is estimated at 700 million barrels of oil equivalent. Project participants are:

  • Agip - 32.5 percent
  • BG - 32.5 percent
  • Texaco - 20 percent
  • Lukoil - 15 percent

Speaking after the signing ceremony, Texaco Inc. Chairman and Chief Executive Officer Peter Bijur said: "We salute the accomplishment of this great cooperative venture, and the commitment of President Nazarbayev to develop Kazakhstan's energy resources. Karachaganak will enable Texaco to enhance significantly our international reserves. The field also represents a key element of Texaco's wider expansion in the Caspian region, which is an important feature of our strategic plan for expanding our position in the global energy market.

"We can now begin the work of developing this world-class project with our partners. Texaco's commitment to Karachaganak demonstrates our commitment to Kazakhstan itself, where we hope this will be the first building block in a long and successful business relationship."

Karachaganak -- discovered in 1979 and potentially holding recoverable reserves of 2.4 billion barrels of oil and condensate, plus 16 trillion standard cubic feet of gas -- will be developed in phases to match the completion of liquids export pipelines. The first phase of development will involve the workover of some of the field's existing wells, the drilling of new wells and the installation of liquid processing and gas injection equipment.

Most first phase facilities will be finished to coincide with commissioning of the Caspian Pipeline Consortium pipeline scheduled for completion by the year 2001. Total liquids and gas sales on completion of the first phase of development are estimated to reach 175,000 barrels of condensate and 500 million standard cubic feet of natural gas per day. Further development work, including additional wells, gas processing and injection equipment, and production facilities, is anticipated to take total liquids and gas sales to levels of 260,000 barrels of condensate and 1.4 billion standard cubic feet of natural gas per day.

Updated: November 1997