Azernews.Az

By Aynur Karimova

Azerbaijan's state energy giant SOCAR, which is keen on expanding operations in the retail oil products market abroad, is interested in developing oil fields in Canada.

SOCAR Head Rovnag Abdullayev told journalists on October 29 that SOCAR has already established certain business relations with Canada.

“Our SOCAR Trading Company actively operates in Canada,” Abdullayev noted.

“We believe that there is a great potential for work both in trade and oil industry sectors. With this purpose, we are preparing to work there,” SOCAR president said, adding that the company’s representative office will be opened in Calgary.

He added that the work plans of energy companies are undergoing certain changes due to the decrease in world oil prices.

“Canada has fields with large stranded oil and gas reserves,” Abdullayev stressed. “I believe that we can be engaged in developing them.”

SOCAR head went on to add that his company is planning to sign a contract with Canada’s Zenith Energy Company for developing Muradkhanli-Jafarli-Zardab onshore oil fields in Azerbaijan.

"The contract is almost ready. Azerbaijani side has already granted permission for signing the contract,” he said.

"Currently, the remaining details of the agreement are under development,” according to SOCAR’s president. "This block of fields is technically very complex, there are some problems, but the service staff is working on these issues."

The block covers a total area of 642.4 square kilometers, while the daily production nears 315 barrels of oil there. Moreover, small volume of natural gas is produced at the block.

The Zenith Company will be the operator of the concession and will hold 80 percent share. The remaining 20 percent share will be owned by the Azerbaijani side.

Zenith's technical personnel have already been allowed access to the fields to inspect the current operation and evaluate the existing infrastructure.

Earlier, Zenith Energy LTD opened its regional office in Baku.

The Muradkhanli-Jafarli-Zardab block is located in the oil and gas area of Yevlakh-Agjabedi-Imishli region of Azerbaijan. Remaining recoverable reserve of the block is estimated at 1.8 million tons of oil and 36 million cubic meters of gas.

Oil supply via Baku-Novorossiysk pipeline to remain unchanged

Touching upon the oil supply through the Baku-Novorossiysk pipeline, Abdullayev said that SOCAR will maintain the volume of oil transportation via this route in 2016 at the level of 2015.

“We plan to transport around 1.5-1.6 million tons of oil via Baku-Novorossiysk,” he noted.

He also added that SOCAR intends to continue using the northern export route.

“From the economic point of view, the third route is very important,” SOCAR head said. “It is important both for us and for the Russian side, since it gets certain revenues.”

SOCAR ships its oil through the Novorossiysk port where it is delivered via the Baku-Novorossiysk oil pipeline.

SOCAR keen on supplying gas to Montenegro

Abdullayev also expressed SOCAR's intention to supply gas to Montenegro. He said that SOCAR continues to work out the project for supplying gas to Albania.

“Recently, Montenegro expressed interest in joining this project,” he noted. “We plan to work out a joint feasibility study of one large project for supplying gas to Albania and Montenegro which will be more profitable."

SOCAR head believes that after commissioning the Trans-Adriatic Pipeline, Albania will have more gas and will be more interested in distributing it to Europe.

Gazprom's gas supply to Azerbaijan

Abdullayev also spoke about purchase of gas from Russian Gazprom Company. He said that SOCAR is not receiving gas from Gazprom, but currently, the sides are discussing the technical details of this issue.

“Currently negotiations between SOCAR and Gazprom are underway. We are working out the technical details of a contract, but it is yet unknown exactly when it [the contract] will be signed,” he further noted.

Russian gas is expected to be supplied with a view to inject it into Azerbaijan’s underground storage facilities in order to use them at full capacity.

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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

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