Volga Gas Company - Karpenskiy License Area

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Karpenskiy License Area

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Karpenskiy License Area

The Karpenskiy licence area is situated in the northwest part of the Caspian Petroleum Province. There are two productive intervals, subsalt and suprasalt, divided by the Kungurian salt, which is a regional seal. The high petroleum potential of the subsalt deposits is supported by discoveries in the marginal parts of the Caspian depression, such as the Karachaganak, Zhanzhol, Kozhhasay, Urikhtau, Kensiyak, Alibekomla, Tengiz, and Astrakhanskoye fields.

The Karpenskiy Licence Area is located approximately 150 kilometres from the city of Saratov and the Central Asian Centre pipeline ("SAS") runs through the centre of the licence area. SAS connects the Turkmenistan and Kazakhstan gas fields with countries bordering Russia to the West, including Ukraine. In addition, the Mokrous pumping station which compresses gas in SAS is approximately 10 kilometres from the northern edge of the Karpenskiy License Area. The SAS would also provide PGK access to local demand through branch pipelines to European Russia.

Exploration of the Karpenskiy Licence Area has been conducted since 1975 when the Ministry of Geology of the Union of Soviet Socialist Republics (the "Soviet Union") approved an exploration programme across the Pre-Caspian depression, following the discovery of the Karachaganak field. Licences covering the Karpenskiy Licence Area were held by entities within the LUKoil Group from August 1996 until May 2006, when the Karpenskiy License was transferred to PGK.

PGK has negotiated a preliminary 20 year offtake agreement for its initial production.

Schlumberger has finished processing and interpretation 3-D seismic on YE block of Karpenskiy License Area. Two spots are identified for drilling. The top of the first structure is located right after thick salt layer at 3000 meters. The second structure (the one which was the initial target) is just below the first structure at 4000 meters. They may (or may not) be separated by a shale layer.