Claims Socar signed deal with ‘fake’ firm
BAKU – An Azerbaijani lawmaker has severely criticized the head of Azerbaijan’s state energy firm Socar over signing a production sharing agreement on the development of two onshore oil fields with a German firm he claims could be fake.
Socar and UGE-Lanser signed the deal on the block of Balakhany-Sabunchu-Ramana and Kurdakhany fields in June 2010.
MP Gudrat Hasanguliyev, chairman of the pro-opposition United Azerbaijan Popular Front Party, told parliament on Friday as the contract was being ratified that he was unable to obtain any information about UGE-Lanser.
"I searched on the internet out of curiosity, but nothing came up," Hasanguliyev said. "I suspect that this company could be fake. Why aren’t we told which countries this company has operated in besides Azerbaijan?"
Hasanguliyev said parliament should not approve agreements signed with companies "whose origin is unknown".
"We cannot allow squandering Azerbaijani people’s wealth this way," he said.
Socar president Rovnag Abdullayev replied that UGE-Lanser has implemented projects in Germany, Romania, Uzbekistan and Georgia since 2003.
"We also established an eco-engineering joint venture jointly with this company in 2003 and implemented a number of environmental projects in Azerbaijan," Abdullayev said, adding that Socar had decided to sign the PSA with UGE-Lanser taking into account the company’s experience in environmental projects as well.
The Milli Majlis ratified the PSA despite differences among lawmakers.
The contract was signed for 25 years with possible extension of five years. UGE-Lanser holds 75 percent in the PSA and Socar has a 25 percent stake.
The Balakhany-Sabunchu-Ramana field has been operated since 1871. 9,549 wells have been drilled at the field, which has produced 271 million tons of oil so far. The field’s remaining recoverable reserves are estimated at 7.3m tons. 208,000 tons of oil were extracted at Balakhany-Sabunchu-Ramana in 2009.
The Kurdakhany field is located 8 km north of the Balakhany-Sabunchu-Ramana field. Geological surveys and exploration work were carried out there in 1914-1947. As of January 1, 2010, 59 wells have been drilled at the field and 198,000 tons of oil produced. Recoverable reserves are estimated at 205,000 tons. The field produced 730 tons of oil in 2009.