Kazakhstan to Hold Licensing Round in 2004

The Kazakh Energy Minister, Vladimir Shkolnik, said plans are being made to hold an exploration licensing round in 2004 for blocks located in the Caspian Sea. More than 100 blocks will be available for exploration and development in the Caspian as part of a $70-billion plan to boost energy output in the former Soviet republic by 2015. Driven by Caspian offshore development, Kazakhstan's oil production alone is projected to more than triple to 3.5 million barrels a day from about 1 million.

Shkolnik said development blocks will be first offered to the national oil company, KazMunaiGaz, starting in 2004, and the company will conduct its own tenders for potential partners and devise development plans. The government will then be in charge of approving the ventures. Then in 2005, Kazakhstan will start putting together acreage packages and will open bidding directly to the world's oil industry.

Details have yet to be worked out as to exactly how the bidding and award process will be handled. Royalty terms under the plan are also undecided, although firms will be expected to contribute to various social programs in the country. Another open question is the percentage of acreage to be divided between KazMunaiGaz and firms tendering directly.