LUKoil, SOCAR mull joint exploration in Azerbaijan's two offshore blocks [PHOTO]

23 January 2020 15:16 (UTC+04:00)

By Abdul Kerimkhanov

The State Oil Company of Azerbaijan (SOCAR) and Russian oil major LUKoil will sign an agreement on exploration of two offshore blocks in Azerbaijan.

"We are discussing a number of projects, including the Nakhchivan block, the offshore block and the so-called transition zone in the north of Absheron. At least our geologists consider them promising," Chief Executive Officer of Russia’s oil major Vagit Alekperov told reporters in Davos, Switzerland on January 22.

"We are going to negotiate exploration with SOCAR. The agreement most likely will be signed at the forum," Alekperov added.

Earlier, President Ilham Aliyev and Alekperov discussed LUKoil’s participation in the development of the Nakhchivan and Goshadash fields as part of the meeting in Davos.

The Goshadash structure is located in the north-eastern part of the Absheron archipelago, in 15 kilometers from the coast, at a distance of 35-40 kilometers from Baku. The depth of water here is 50 meters. Malaysian Petronas showed interest in developing this area.

In the meantime, SOCAR and LUKoil have confirmed their intention to cooperate on a number of offshore structures in the Azerbaijani sector of the Caspian Sea.

“The head of SOCAR Rovnag Abdullayev and the President of LUKoil Vagit Alekperov on Wednesday in Davos signed a memorandum of understanding on cooperation on the exploration block, which includes Nakhchivan prospective structure and the shallow structures of Goshadash and the Caspian-Guba,” according to SOCAR's official website.

The structure of Nakhchivan is located 85 km south of Baku. Investments in the development of the field are estimated at $2 billion. Projected reserves are 110 million tons of oil and 85 billion cubic meters of gas.

In 1997, SOCAR and the American ExxonMobil signed the Professional Services Agreement contract for the Nakhchivan prospective structure. The parties to the contract were ExxonMobil - 50 percent, SOCAR - 50 percent.

The first exploratory well did not reveal hydrocarbon reserves, and the investor refused to continue exploration, paying compensation in the amount of $18 million. German Wintershall and Indian ONGC Videsh showed interest in this structure.

Earlier, President of SOCAR Rovnag Abdullayev met with the CEO of LUKoil Vagit Alekperov on 11 November 2019. At the meeting, the sides exchanged views on the current state and prospects of cooperation between the two companies.

SOCAR is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in domestic and international markets, and supplying natural gas to industry and the public in Azerbaijan.

Three production divisions, one oil refinery and one gas processing plant, a deep water platform fabrication yard, two trusts, one institution, and 23 subdivisions are operating as corporate entities under SOCAR.

The company conducts various petroleum activities in countries such as Georgia, Turkey, Romania, Switzerland, Germany and Ukraine, including trading activities, mainly in Switzerland, Singapore and Nigeria.

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Abdul Kerimkhanov is AzerNews’ staff journalist, follow him on Twitter: @AbdulKerim94 

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