Gazprom's executive board yesterday approved a proposal to create a joint company with LUKoil. The new company, called TsentrKaspneftegaz, will be set up on a parity basis. It is intended to develop the Central oil and gas field in the Caspian Sea. Gazprom's press office told Rosbalt that the company would probably be registered in Moscow.
TsentrKaspneftegaz is being set up as part of an agreement between Russia and Kazakhstan on delimiting the northern part of the Caspian Sea. The agreement was signed by the Russian and Kazakh presidents in May 2002. It requires Russia and Kazakhstan to appoint organisations that will later set up a joint company. These organisations must have the authority to act in the Caspian. The Russian organisation will have a 50% stake in the joint company. In April 2003, the Russian government instructed Gazprom and LUKoil to create a joint company to serve as Russia's organisation during development of the Central field.
The Central oil and gas field is located in the Russian sector of the Caspian Sea about 150 kilometres to the east of Makhachkala. LUKoil owns an exploration license for the field, whose recoverable oil reserves total 521.1 million tonnes, and gas reserves 91.7 billion cubic metres.