Azernews.Az

BAKU - Eni SpA could resume exploration and production in Azerbaijan and take a central role in a project to ship compressed natural gas from Turkmenistan to the Azerbaijani pipeline network, according to Eni’s e-mailed statement.
The Italian company -- increasingly focused on the Caspian region --met Tuesday in Baku with President Ilham Aliyev and other officials to discuss a compressed gas project that would allow the transportation and transit of Turkmen gas through the country via an existing pipeline.
"We are looking at between two billion cubic meters and three billion a year that will go mainly to Turkey," Eni Chief Executive Paolo Scaroni said Tuesday in a telephone interview from Baku with The Wall Street Journal. "The gas would use an existing pipeline [in Azerbaijan] and [the project] won't be ready before 2012."
The Turkmen gas would be transported some 300 kilometers across the Caspian Sea via ship to Baku. Some of the gas would be Eni’s, but most would have otherwise been flared during Turkmenistan's offshore oil production process, said Scaroni.
The possible upstream comeback in Azerbaijan will focus mainly on oil but it also covers associated gas. The Eni CEO said the company may replace operators that want to exit, but that nothing was imminent.
The Italian giant is eyeing a project to develop Azerbaijan's prospective offshore structures Dan Ulduzu and Ashrafi. Azerbaijani Industry and Energy Minister Natig Aliyev and the ENI Chief Executive discussed the possibility of the company’s joining the project in Baku on Tuesday, Ministry Spokesman Azer Mansimli said.
Earlier, foreign companies carried out work on Dan Ulduzu and Ashrafi. However, the contract was revoked after exploration drilling did not reveal commercially viable volumes of hydrocarbons.
The production sharing agreement was signed in 1997, with BP holding a 30% stake, while Unocal held 25.5%, Itochu 20%, Delta Hess 4.5%, and Azerbaijan's state energy firm SOCAR 20%.
According to Mansimli, talks in Baku also centered on transporting Turkmen compressed gas through Azerbaijan to European markets. The joint taskforce will examine the whole range of technical, legal and commercial issues pertaining to the project.
Eni is a key operator in hydrocarbon-rich Kazakhstan with big stakes in the massive Karachaganak and Kashagan projects. It also has an oil-services venture in Azerbaijan through its subsidiary Saipem SpA.
Eni is also looking to expand in Turkmenistan. The company has operated in the country since 2008, and in 2009, daily production was 9,000 barrels of oil.
Turkmenistan has vast untapped gas reserves and is seeking ways to boost production and new export routes. The country's 2009 proved gas reserves amounted to 8.10 trillion cubic meters—the fourth biggest in the world, according to the BP Statistical Review of World Energy of June 2010.*