Two Giants To Reach Agreement

Russian oil magnate Lukoil intends to reach an agreement with its compatriot Gazprom on the transmission of gas from offshore fields in the northern part of the Caspian Sea.

The company plans to use the Makat-North Caucasus pipeline, which is also used to transit Central Asian gas, according to Lukoil's President Vagit Alekperov.

Lukoil has already signed an agreement with Gazprom on the sale of gas that Lukoil would produce at the Nakhodkinskoye field in the Yamal-Nenets autonomous district.

Lukoil is working on 10 oil and gas structures in the northern Caspian. It has carried out exploration drilling at five structures: Khvalynskaya, 170 Km, Shirotnaya, Sarmatskaya, and Rakushechnaya.

Eight wells had been drilled there and five large multi-layer oil/gas, gas and gas condensate fields had been discovered by October 1, 2004.

Lukoil puts the total recoverable hydrocarbon reserves in the Northern block at about 766.1 million tonnes of fuel equivalent. This includes 78.2 million tonnes of oil, 655 billion cubic meters of gas, and 32.9 million tonnes of condensate. Lukoil plans to start production there in 2008.