Under the agreement inked earlier this year, Santos can earn up to 80% equity in Caspian’s 18 licences over the Naryn and Fergana Basins, which cover a total of 24,000 square kilometres.
Having already spent $3 million reprocessing 2370km of seismic data, Santos will now commit to spending the next $6 million on the project by February 2008.
Caspian told the Australian Stock Exchange yesterday that Santos was currently engaged in fieldwork and planned to undertake a seismic program covering several targets in first half of next year.
While the Fergana Basin is an established petroleum province with a production history dating back more than a century, the Naryn is a frontier basin that received limited attention during the Soviet era.
But Caspian told the ASX in April that the Kyrgyz State Agency for Geology and Mineral Resources has listed the Naryn as a priority petroleum exploration area.
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, executive director Colin Carson 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.