Lukoil Overseas is shutting down two projects in the Kazakh sector of the Caspian Sea after geological exploration failed to find commercial reserves of hydrocarbons, according to an Interfax report citing Andrei Kirillov, head of the company's local affiliate in Astana.
Kirillov told Interfax "Lukoil Overseas is participating jointly with partners in three geological exploration projects on the Caspian Sea shelf. With regard to the Atashsky and Tyub-Karagan projects, our calculations and expectations were not confirmed and these projects are now in the shutdown stage."
He said that all commercial and social commitments under the projects have been met. He added that a drilling contractor is currently being selected for the third license section, Zhambai Yuzhny-Yuzhnoye Zaburunye. He also said "The process has been delayed in connection with the difficult operating conditions at that shallow water section and also due to the lack of appropriate drilling equipment in the region."
Kirillov said "The overall geological exploration operations in the Caspian have not produced the expected results and we have not made any commercial discoveries."
Work at the Atashsky section was performed by Atash a joint venture between KazMunayGas subsidiary KazMunayTeniz and Lukoil Overseas Atash. Under the terms of the contract, Lukoil bore all of the project costs in the geological exploration phase.