SOCAR, UAE firm sign deal on Caspian fields
Azerbaijan’s state oil company SOCAR and the United
Arab Emirates-based Bahar Energy Ltd signed an agreement Tuesday on
exploration, restoration and production sharing from the block of
Bahar and Gum-Daniz energy fields in the Azerbaijan sector of the
Caspian Sea. The document was signed by SOCAR President Rovnag
Abdullayev and Bahar Energy Ltd CEO Richard McDougal. SOCAR holds
20% in the PSA.
Abdullayev said the agreement with the UAE firm is the 28th PSA contract Azerbaijan signed with foreign companies. The agreement covers 25 years, with a possible extension for five more years. Gas reserves available at the energy block are estimated at 25 billion cubic meters. The investment program is initially estimated at $1 billion, with the entire bulk of investment to be channeled by Bahar Energy Ltd.
"We believe that Bahar Energy Ltd will meet its investment obligations," the SOCAR president said.
According to him, the contract consists of two parts. The first part covers rehabilitation and development, while the second one envisions exploration at the Bahar 2 block on the Bahar field. An exploration well will be drilled there over three years, and another one may be drilled afterwards, if necessary. Under the contract, production is to be increased 50% over the three-year period from the 2008 level of 54,000-55,000 tons of oil and 195 million cubic meters of gas.
Abdullayev said SOCAR experts are predicting a 15% reduction in gas production and a 10% reduction in condensate output at Bahar over the next five years. However, SOCAR believes that attracting foreign capital will allow stabilizing production and increasing hydrocarbon reserves over a short term.
McDougal said drilling 50 wells and repair of 100 existing wells is planned on the contract area in the initial stage.
SOCAR’s revenues in the first stage of the project are valued at $2.5 billion.
The Gum-Daniz field, located 21 km southeast of the capital Baku, has been in operation since 1955. The deposit has produced about 28.9 million tons of oil and 27 billion cubic meters of gas to date.
The Bahar field, situated 40 km southeast of Baku, has been developed since 1969. Over 16.8 million tons of oil and 128.7 billion cubic meters of gas have been extracted from the field.*
Abdullayev said the agreement with the UAE firm is the 28th PSA contract Azerbaijan signed with foreign companies. The agreement covers 25 years, with a possible extension for five more years. Gas reserves available at the energy block are estimated at 25 billion cubic meters. The investment program is initially estimated at $1 billion, with the entire bulk of investment to be channeled by Bahar Energy Ltd.
"We believe that Bahar Energy Ltd will meet its investment obligations," the SOCAR president said.
According to him, the contract consists of two parts. The first part covers rehabilitation and development, while the second one envisions exploration at the Bahar 2 block on the Bahar field. An exploration well will be drilled there over three years, and another one may be drilled afterwards, if necessary. Under the contract, production is to be increased 50% over the three-year period from the 2008 level of 54,000-55,000 tons of oil and 195 million cubic meters of gas.
Abdullayev said SOCAR experts are predicting a 15% reduction in gas production and a 10% reduction in condensate output at Bahar over the next five years. However, SOCAR believes that attracting foreign capital will allow stabilizing production and increasing hydrocarbon reserves over a short term.
McDougal said drilling 50 wells and repair of 100 existing wells is planned on the contract area in the initial stage.
SOCAR’s revenues in the first stage of the project are valued at $2.5 billion.
The Gum-Daniz field, located 21 km southeast of the capital Baku, has been in operation since 1955. The deposit has produced about 28.9 million tons of oil and 27 billion cubic meters of gas to date.
The Bahar field, situated 40 km southeast of Baku, has been developed since 1969. Over 16.8 million tons of oil and 128.7 billion cubic meters of gas have been extracted from the field.*
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