Baku, Azerbaijan, Aug. 27
By Maksim Tsurkov - Trend:
The Salyan Oil operating company, which develops the Kursengi and Garabagli onshore fields in Azerbaijan, has brought the number of producing wells to 254, a source on oil and gas market of Azerbaijan told Trend Aug.27.
The drilling of new wells has not been carried out on these fields since 2011, according to the source.
"We managed to increase the number of wells due to reconstruction and repair of old wells, as well as their development by perforation," the source said. "We manage to maintain the production level at the expense of these funds without letting it fall. Now production is carried out at 254 wells, yet another 81 wells are stopped for repairs."
The source said that drilling of new wells on the onshore areas will lead to an increase in capital expenditures.
"It will be difficult to cover these costs given the current price of oil," said the source. "The average prime cost of oil onshore in Azerbaijan is $32-33 per barrel, on the Kursengi and Garabagli fields - $21-22 per barrel, but even with such prime cost, the drilling of new onshore wells is not economically profitable."
The Salyan Oil operating company, which develops the Kursengi and Garabagli onshore fields in Azerbaijan, produced about 100,000 metric tons of oil since early 2015.
The fields are located in Azerbaijan's Salyan region, 150 kilometers from Baku. The residual oil reserves at the contract area exceed 150 million metric tons, according to a number of experts.
Agreement on the development of Kursengi-Garabagli onshore fields was signed in 1998 for a period of 25 years. The Salyan Oil operating company was created under the contract for carrying out the work. The participants of the project are SOCAR and China National Oil & Gas Exploration and Development Corp. (CNODC).
Kursengi and Garabagli fields have been developed since 1960 and 1962 respectively.
Edited by CN
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