/REUTERS, Astana, Raushan Nurshayeva, December 29, 03/ - The Ministry of energy and mineral resources of Kazakhstan and national oil and gas company Kazmunaigas signed a production sharing agreement at Tyub-Karagan field and a contract for Atash field exploration, which are located at Kazakhstan part of Caspian shelf.

Fields are untied under Dostyk structure, which Kazmunaigas plans to develop in collaboration with Russian LUKOIL at parity principles at start-up stage. The cost of a project is estimated at $3 bn.

Agreement is signed a couple of days prior to new tax legislation comes in force, according to which a right for PSA is given only in case if no bidder found for contract field development under general terms, which provides for new tax on export of crude oil and does not guarantee taxation stability.

"Today the agreement was signed within the old legislation, but it must be stressed, that judging on its parameters concerning taxation, approaches it employs, the agreement is very close to the new law", - Vladimir Shkolnik, the minister of energy and natural resources commented on the deal, having added that return on project will be 15 percent.

Vagit Alekperov, the head of LUKOIL visited Kazakhstan a week ago and discussed the development of Dostyk block with Kazakhstan PM Danial Akhmetov. Alekperov said he would sign a contract in the beginning of January. Russian President Valdimir Putin is expected to visit Kazakhstan approximately at the same time.

According to Shkolnik, Tyb-Karagan's mineable resources are estimated at 113 m tones of oil. Capital expenditures that project requires according to estimates of the Ministry of energy are $1.7 bn, exploitation costs - $2.1 bn. PSA on Tuyb- Karagan is supposed to last for 40 years.

"As a result of this project the state will benefit $3.5 bn", - Shkolnik said.

Uzakbai Karabalin, the president of Kazmunaigas stated Kamunaigas plans to drill the first exploration hole at Tyub-Karagan filed.

"In 2005 having drilled a hole, we hope we will know for sure, whether the field will be launched or not", - Karabalin said at press conference.

This is the first sea project of Kazmunaigas.

Kazmunaigas is supposed to have 50 percent in each project within recently approved program of Kazakhstan shelf development, potentially reach with hydrocarbons. Kazakhstan has not undertaken industrial oil production at shelf.

"The first real step on execution of Caspian shelf development program has been made. I congratulate all of you with this event", - Shkolnik said.

[2003-12-29]