Mobil Corp. Signs Joint-Venture Agreement with Kazakhstan

Strategic Insights -

Mobil Corp. has finally made a significant breakthrough in its efforts to explore for oil and gas in Kazakhstan after several false starts. The company has signed a joint-venture agreement with the Kazakh government to explore the 4 million-acre Tulpar Block in the northwest corner of the country. The agreement establishes Tulpar Munai Ltd., a 50-50 venture between Mobil and three state-owned Kazakh companies, to carry out exploration work over five years in the western Atyrau and northwestern Aktyubinsk areas. The venture has the potential to invest up to $80 million over the five-year period, with the possibility of significant investment in a subsequent 25-year production phase if substantial reserves are discovered.

Key Takeaways:

  • Mobil Corp. has signed a joint-venture agreement with Kazakhstan to explore the 4 million-acre Tulpar Block in the northwest corner of the country.
  • The agreement establishes Tulpar Munai Ltd., a 50-50 venture between Mobil and three state-owned Kazakh companies: geology enterprises Poisk and Tulpar, and the state oil and gas company Aktyubinskneft.
  • The joint venture will carry out exploration work over five years in the western Atyrau and northwestern Aktyubinsk areas, with a potential investment of up to $80 million.
  • If significant reserves are discovered, the investment in a subsequent 25-year production phase could rise to several billion dollars.
  • The agreement coincided with a visit to Almaty by U.S. Deputy Energy Secretary William H. White, who signed a joint declaration on cooperation in energy policy with Kazakhstan.
  • One of the main issues discussed during talks between White and Kazakh Prime Minister Akezhan Kazhegeldin was oil transport systems from Kazakhstan, which currently depends on Russia's export pipeline system.
  • Mobil will hold a 50% interest in Tulpar Munai Ltd., while the Kazakh companies will hold the remaining 50%.

Statistics:

  • The joint venture will cover an area of 4 million acres in the Tulpar Block.
  • The agreement will remain in effect for 25 years, with a potential investment of $80 million over the initial five-year period.
  • The potential investment in a subsequent 25-year production phase could rise to several billion dollars if significant reserves are discovered.

Sources:

  • USA TODAY
  • Reuters
  • Mobil Corp.'s official statement