SOCAR, Total reach agreement in principle to use new platform

4 August 2016 13:00 (UTC+04:00)

3 094

By Nigar Abbasova

Azerbaijan’s state energy giant SOCAR and French Total have reached an agreement in principle to use the new generation drilling rig for the work at the Absheron gas field in the Caspian Sea, a source on the country’s oil and gas market told Trend.

The sides have made a significant progress in the negotiations on the issue over the past time.

“The parties are in the way to sign a contract that can happen until the completion of the rig’s construction,” noted the source.

Construction of the first new generation drilling rig for SOCAR started in 2013. It is expected that the construction will be completed in late 2016. The new rig is designed for drilling of wells with a depth of up to 8,000 meters at a sea depth of 1,000 meters. The cost of the new generation floating drilling rig construction project is nearly $1.12 billion.

Azerbaijan’s state oil fund SOFAZ has so far allocated $770.1 million to fund construction of a new generation floating drilling rig. Some $74 million was issued for the project in the first half of 2016.

Earlier, SOCAR President Rovnag Abdullayev said that the Fund has managed to save about $60 million in the process of construction of the drilling rig, adding that there were no delays in the process of construction and the rig will be ready in 2017.

The first volumes of gas from Absheron gas and condensate field is expected to be received in late 2021 and early 2022, according to the forecasts. The final investment decision on the project will be adopted in the fourth quarter of 2017, while the first well at the field is expected to be drilled in the third quarter of 2019.

The discovery of Absheron field was announced in 2011. The reserve of Absheron, which is considered to be the second largest field in the country, is estimated at 350 billion cubic meters of gas and 45 million tons of condensate, according to SOCAR geologists.

Previously it was reported that two leasing options were under consideration, including leasing of the rig to the French Total Company to implement drilling operations on Absheron gas-condensate or to BP for the use within the framework of the third phase of development of “Shah Deniz”.

SOCAR holds 40 percent share in the project, while the shares of Total and Engie are 40 and 20 percent respectively.

Being headquartered in Paris, Total is considered to be one of the world's leading energy companies. The operations of the company cover the entire oil and gas chain including exploration and production of crude oil and natural gas as well as power generation, transportation, refining, product trading.

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

Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova