Prague - Czech oil tycoon and billionaire Karel Komárek is to cooperate with Russian giant Gazprom.

Komárek´s Moravian Oil Company (MND) and Russian company Vemex, owned by Gazprom, signed a deal Wednesday on cooperation in natural gas storage services. The natural gas is going to be stored in a newly built underground storage reservoir in the Czech Republic.

MND spokesperson Daniel Plovajko informed of the deal on Thursday.

Daniel Plovajko also alleged no agreement was signed on natural gas delivery by Vemex.

Vemex general manager Vladimir Ermakov is convinced it is going to be a beneficial cooperation for both sides.

"Storing natural gas in a Czech underground storage reservoir is going to strengthen our position in the natural gas market," said Ermakov.

According to him, it is the first step to liberalise the market and create a competition environment that would benefit end users.

"Vemex, which is a subsidiary of Gazprom, is a strong and strategic partner for us. We are planning a longterm cooperation with them in natural gas storage and business deals in both the Czech Republic as well as in Russia. The signing of the memorandum of undertsanding is an important step to start building business relations," stated MND general manager František Komárek, uncle of tycoon Karel Komárek.

Last year, privately owned MND produced over a quarter of a million m3 oil, which is 40,000 m3 less in a year-to-year comparison .

On the other hand, the natural gas production increased from 94 million to 102 million m3 since last year. The company operates in Pakistan where the production has decreased from 327 million to 312 million m3.