On Monday, the company told the ASX it has been awarded eight licences in the Naryn Basin, where farm-in partner Santos will earn an 80% interest by funding $24 million of the exploration and development work until mid-2009.
This was in addition to a similar deal made last December, in which 10 exploration licences were awarded to the joint venture in the adjacent Fergana Basin.
The latest agreement will see Caspian team up with state-owned KyrgyzNefteGas (KNG) to develop the Mailisu III oil field, which adjoins the southern boundary of Caspian’s Ashvaz licence. Discovered in 1962, the field is a classic four-way closed anticline neighbouring the Ashvaz monocline structure.
A 1995 US Department of Energy report on oil and gas resources in the Fergana Basin, estimated the Mailisu III field contained 6.43 million barrels of recoverable oil reserves and 4 billion cubic feet of gas.
To date, the Mailisu III field has produced about 900,000 bbls of oil from KNG’s production unit in the south-east corner.
“Caspian believes that the most promising central part of the structure was not considered for production in Soviet times for logistical reasons,” the company said.
“There have been over 20 stratigraphic/structural, exploration and appraisal wells drilled into the structure, but only some of them tested Paleogene beds, with about half being drilled straight to Cretaceous and Jurassic beds to produce gas for domestic consumption in Soviet times.”
The development program will involve drilling two vertical appraisal wells to test four Paleogene reservoirs, followed by two short horizontal wells into the most prospective reservoirs.
