Azernews.Az

Drillings of new test wells and boreholes as part of the second stage of the Azerbaijani Shah Deniz offshore gas condensate field development is not allowed until authorisation of the second phase, a source in the oil and gas market told Trend news agency on Monday.

Currently work on the SDX-07а test well drilling is being carried out, the source said.

"The second phase involves a multi-billion dollar investment. It also requires costly drilling of new wells and therefore there will be no drilling work until official authorisation," the source said.

The authorisation of the second phase of Shah Deniz development is likely to take place in the spring at the expected time of completion of the SDX-07а drilling by the end of April. The current depth of the well is 4940 metres.

Two offshore platforms and 20 subsea wells will be installed for the production of an additional 16 billion cubic metres of gas under the Shah Deniz-2 project. Peak production is projected at 9 billion cubic metres in the first stage of development. According to forecasts, gas production can be increased up to 24 billion cubic metres a year in the second stage of development.

Shah Deniz reserves are estimated at 1.2 trillion cubic metres of gas.

The contract to develop the Shah Deniz field was signed on June 4, 1996. Participants to the agreement are: BP (operator) - 25.5 per cent, Statoil - 25.5 per cent, NICO - 10 per cent, Total - 10 per cent, LukAgip - 10 per cent, TPAO - nine per cent and SOCAR-10 per cent.