Lukoil & Gazprom Form Joint Venture to Explore Caspian Sea

The executive board of Gazprom has approved a proposal to create a joint venture with Lukoil to develop the Central oil and gas field in the Caspian Sea. The new company will be named TsentrKaspneftegaz and will be set up on a parity basis. TsentrKaspneftegaz is being set up as part of an agreement between Russia and Kazakhstan on delimiting the northern part of the Caspian Sea. The agreement was signed by the Russian and Kazakh presidents in May 2002.

In April 2003, the Russian government instructed Gazprom and Lukoil to create a joint company to serve as Russia's organization during development of the Central field. The Central oil and gas field is located in the Russian sector of the Caspian Sea about 150 kilometers to the east of Makhachkala. Lukoil owns an exploration license for the field, whose recoverable oil reserves total 521.1 million tons, and gas reserves 91.7 billion cubic meters.