Kashagan Discovery Declared Commercial

ExxonMobil reports that the contracting companies of the North Caspian Sea Production Sharing Agreement have declared the commerciality of the world-class Kashagan discovery, in conjunction with KazMunayGas (KMG), the Kazakhstan National Oil and Gas Company representing the Government of the Republic of Kazakhstan.

Commenting on the decision, Mr. Rex Tillerson, ExxonMobil senior vice president, stated, "We are pleased to declare the Kashagan discovery commercial. It is an important milestone in progressing the development of this world-class Kazakhstan resource. ExxonMobil has worked with the other participants in the North Caspian Sea PSA and with KMG on the many challenges presented by this project, and today's declaration of commerciality is a testimony to the synergy of those efforts." Agip KCO, on behalf of the North Caspian Sea PSA joint venturers, recently completed a 24-month contractual period of geological and reservoir appraisals, as well as engineering and transportation studies and environmental and health and safety assessments. This work demonstrated that the Kashagan field constitutes a commercial discovery.

The Kashagan field was discovered in 2000. According to preliminary estimates, producible resources are estimated to be in the range of seven to nine billion barrels of oil and further appraisal work is underway to better define the resource. The field is located in the northern part of the Caspian Sea, around 45 miles southeast of Atyrau.

The North Caspian Sea PSA covers almost 1.4 million gross acres. Companies involved in developing this area are Eni (operator -- 16.67 percent), ExxonMobil (16.67 percent), BG (16.67 percent), Inpex (8.33 percent), Phillips (8.33 percent), Shell (16.67 percent), and TotalFinaElf (16.67 percent).

In addition to the interest in the North Caspian Sea PSA, ExxonMobil affiliates in Kazakhstan hold a 25 percent interest in the giant Tengiz oil field and a 7.5 percent interest in the Caspian Pipeline Consortium.

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