Kazakh state oil and gas company KazMunaiGas, or KMG, said Sunday it has signed a memorandum of understanding with ConocoPhillips (COP) and Mubadala Development Company for joint exploration and production of the N Block, an offshore field in the Caspian Sea.
"The parties will now have until December 31, 2008, to negotiate the definitive agreements for the assignment by KMG of a 49% interest in the subsoil use contract to be shared equally between ConocoPhillips and Mubadala," KazMunaiGas said in a statement. "KMG will remain the majority partner in the venture."
KMG said the N Block "is considered highly prospective for both oil and gas."
It is located 30 kilometers south southwest offshore the Caspian town of Aktau. The block covers approximately 8,100 square kilometers and is considered to have high prospects for both oil and gas, KMG said. KMG had earlier estimated the block to hold about 637 million metric tons - or 4.7 billion barrels - of oil equivalent.
The memorandum of understanding was signed by Kairgeldy Kabyldin, chief executive of KMG; Jim Mulva, chief executive of ConocoPhillips, and Khaldoon Khalifa Al Mubarak, chief executive officer of Mubadala.
The N Block had been the target of attention of both Royal Dutch Shell PLC (RDSA) and ConocoPhillips before the Kazakh government granted exclusive exploration and production rights to KMG last year.