Caspian Sunrise BNG contract area licence extended
Source - SMW
Caspian Sunrise's has agreed an early extension of the licence at its flagship BNG contract area with the Kazakh regulatory authorities.
Caspian Sunrise has a 99% interest in the BNG contract area, which is located in the west of Kazakhstan, 40 kilometres south-east of Tengiz, on the edge of the Mangistau Oblast. Caspian Sunrise said that as previously announced, the licence was due for renewal in June 2018, when it was expected the company would apply for a 29-year full production licence to cover the whole BNG contract area.
A statement said: 'The principal benefit from moving to a full production licence will be the ability to sell the majority of oil produced based on world prices rather than the domestic prices permitted under an appraisal licence (currently typically $16-$20 per barrel).
'A drawback is that a condition of such a licence upgrade may have been the need to curtail some of the planned exploration and development activities especially at our deeper prospects.
'This stems predominantly from the need to have explored regions and structures during the appraisal period of a licence to allow unrestricted further development during the full production phase.'
Caspian Sunrise said it was therefore delighted to announce its early agreement with the Kazakh regulatory authorities to extend the whole of its licence at BNG on an appraisal basis for a further six years effective from June 2018 with the opportunity from that date to apply to convert individual structures to full production status at the company's timing. It said: 'The ability to elect the timing of when to apply for different structures to move to full production status will allow the company to manage the move from appraisal to production on a structure by structure basis rather than for the Contract Area as a whole.
'This marks a very positive outcome as it should be possible for instance for the company to operate its highly successful and well developed MJF structure on a full production licence basis while continuing to explore other shallow and deep prospects.'