AIP to develop 700 bn cf Shagyrly-Shomyshty gas field in Kazakhstan

Aug 17, 1999 02:00 AM

American International Petroleum Corporation announced it has received notice that the State Committee of the Republic of Kazakhstan on Investments has approved the Operations Contract for the development of the Shagyrly-Shomyshty gas field in accordance with Government License No. 1551.
A Kazakhstan government report estimates proved recoverable gas reserves at 700 bn cf for the 174,000 acre field. The gas field has a shallow Eocene pay zone at 1,300-1,500 feet with an average net pay thickness of 10-30 feet.
The Operations Contract governs all aspects of the development of the field over the 30-year License period, including the duties and obligations of both the Company and Kazakhstan government. In particular, the Contract provides the Company, which has a 100 % net working interest in the License, with guarantees for the right to export the gas according to the petroleum code as well as stability of taxes and economic provisions.
The initial drilling program will begin later this year with the drilling of two test wells to reconfirm previous well production test rates that ranged between 2.0-5.5 mm cfpd. The engineering plans for the production facilities are being designed to handle 200 mm cfpd of gas.
The Company is currently holding discussions regarding contractual arrangements for the marketing and export of gas produced from the field, as well as equipment and construction financing for certain segments of the project. Detailed engineering design is scheduled to begin later this year with initial gas sales in early 2001, subject to the conclusion of project finance discussions.

American International Petroleum Corporation is a diversified petroleum company which, through various wholly owned subsidiaries, is involved in oil and gas exploration and development in Kazakhstan, and in refining, marketing and transportation of petroleum products in the United States.

Source: Business Wire
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