RusEnergy

14.03.2005 14:09 MSK MosNews - Russian oil major Lukoil and Kazakh state oil firm KazMunaiGaz agreed on Monday to set up a venture to tap a Caspian offshore field, which will require $1 billion in investment, the Reuters news agency reports. The Khvolynskoye field is estimated to contain 322 billion cubic meters of gas and more than 50 million tons (367 million barrels) of oil and gas condensate reserves. "Today we are starting the actual implementation of the project. Total investment will amount to $1 billion," Lukoil 's President Vagit Alekperov told a news conference. He said commercial output at the field could be launched in 2010. Caspian neighbours Kazakhstan and Russia agreed in 2003 to work jointly on disputed oilfields in the oil-rich shallow sea. These deposits included Khvolynskoye, Tsentralnoye and Kurmangazy. Rosneft and Kazakhstan have been disputing the terms of the Kurmangazy venture for more than a year after Astana toughened rules on production sharing agreements and raised oil taxes. Rosneft has questioned the profitability of its project with KazMunaiGaz to develop the field with estimated reserves of between 700 million and one billion tons of crude and required investment of $10 billion. But on Monday, Kazakhstan's Energy Minister Vladimir Shkolnik said a deal on Kurmangazy should be also signed soon as the partners were close to reaching a compromise. He declined further comments. Kazakhstan holds huge reserves of hydrocarbons and relies heavily on foreigners to develop its natural wealth.