Baku, Azerbaijan, Oct.21
By Nargiz Sadikhova - Trend:
North Caspian Operating Company (NCOC) and Shell company has announced abandonment of Kalamkas-Sea and Khazar oil fields development plans respectively, Trend reports with reference to Kazakh media.
“This decision is based on low profitability of the projects due to the high capital costs. In December 2018, Kazakhstan and participants of the North Caspian Project signed an agreement in relation to Kalamkas Sea, which stated that if the development plan is not approved by October 2019, the field is to be returned to the possession of the country,” Kazakh Ministry of Energy said.
According to the information, the procedure on return of the the subsoil use rights of the Kalamkas-Sea field to the country’s ownership should be started soon.
“Following the end of the process, the country may consider the possibility of attracting other investors into the project. New agreements will be based on existing tax laws instead of the terms of production sharing agreement. This is a benefit for the country from the economical point of view,” the report said.
At the same time, project implementation costs incurred by existing shareholders will remain non-refundable.
“Shell company has invested nearly $900 million into Khazar project, i.e. into exploration, seismic works and drilling of appraisal wells. These funds will be passed to the possession of the government gratis,” the statement said.
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