Last December, Santos farmed-in with an identical equity to 10 of Caspian’s 100%-owned exploration licences in the adjacent Fergana Basin.

The new deal covers 7200 square kilometres of the Naryn Basin, in which Caspian will continue to be carried through a significant work program in a larger number of licences, the company said.

The award of the licences means Caspian now has the dominant acreage position in the Naryn and Fergana Basins, with 18 licences covering a total of 24,000sq.km, the company said.

“Unlike the Fergana, the Naryn is a frontier basin which received limited attention during the Soviet era,” Caspian director Colin Carson said.

“However, the Kyrgyz State Agency for Geology and Mineral Resources has listed the basin as a priority petroleum exploration area.”

Carson said five exploration/stratigraphic wells were drilled mostly without seismic during the Soviet era to gather geological data. Gas shows were encountered in one well, with some bitumen in another, indicating hydrocarbons had been generated, he said.

Several large thrust fault-related classic four-way closure structures in the basin and salt diapirs in the centre of the basin represent additional exploration targets, according to Carson.

A sedimentary section, up to 5km deep in the basin centre, includes low-rank coal deposits as potential source rocks and reservoirs in the form of Tertiary sandstones and conglomerates and Upper Paleozoic limestone, he said.

Caspian is currently reviewing further opportunities for oil projects in the Kyrgyz Republic and is assessing drilling options for the shallow reservoirs within its northern Fergana licences.