Under the document, the parties are to cooperate by forming joint ventures which will hold exploration and production licenses for the said subsoil areas.
According to the document, Rosneft and KNOC will, to the extent that the terms and conditions of the memorandum are to be implemented, set up working groups in order to define the parameters of cooperation and select advanced and economically efficient technologies that are available to the parties in the field of exploration, evaluation and development of hydrocarbon deposits.
The document states that Rosneft and KNOC may, in the longer run, enter into more detailed agreements for the development of those subsoil areas.
The licenses for the development of the Veninsky block and the West Kamchatka shelf segment are held by Rosneft. The extractable reserves of the Veninsky block are 51 million tons of oil, 37 million tons of gas condensate and 578 billion c.m. of gas.
The predicted resources of the West Kamchatka shelf are preliminarily estimated at 900 million tons of comparison fuel in 26 promising structures.
Sergei Bogdanchikov, Rosneft's head, noted during his conversation with journalists after the signing of the memorandum that those projects are "comparable to the Sakhalin-1 and Sakhalin-2 projects in terms of their scope". According to him, the first phase of work under the projects is scheduled for two and a half years and provides for $250 million in investments. Of that amount, about $150 million could be invested in geological exploration in Kamchatka and about $100 million in Sakhalin.
As noted by S. Bogdanchikov, this starts the development of a new oil and gas production region. "No such work has ever been conducted in Kamchatka", he said.
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