Lukoil Overseas, Uzbekneftegaz sign agreement

Interfax October 4 Lukoil Overseas President Andrei Kuzyaev and Uzbekneftegaz Managing Director Shavkat Mazhitov have signed an agreement on joint activity in Moscow, Lukoil Overseas said in a press release. The signing of this agreement is one of the stages in implementing a production sharing agreement for the Kandym-Khauzak-Shady gas project, signed on June 16, 2004. The agreement sets down the rights and obligations of the participants in an investment consortium containing Lukoil Overseas (90%) and Uzbekneftegaz (10%). After the signing of the agreement, the participants in the consortium sent the Uzbek authorized body - the Economics Ministry - a list of five members of a joint management committee for the project. The chairman of the committee is Lukoil Overseas Senior Vice President for Operational Activity Azat Shamsuarov. The Uzbek government will appoint another five members to the committee. The first meeting of the management committee will take place in mid-October in Tashkent, and the second - in the same place a month later, at which the fact that the PSA has come into effect will be officially noted. The PSA is for 35 years. Confirmed geological reserves of natural gas at the contract zone amount to 283 billion cubic meters. Planned capital expenditure on the project amounts to about $1 billion. The start of industrial gas production is planned for 2007, maximum annual production will reach about 9 bcm, and total accumulated production may reach 207 bcm.