An exclusive interview of Trend with the Lukoil Overseas Vice President Oktay Movsumov

What are the prospects for drilling of the second exploration well on the Yalama structure? What are the reasons for the LUKOIL decisions to drill the second exploration well on the Yalama structure or to give up going on prospecting on Yalama?

The Yalama-Samur structure, to which also the D-222 block belongs, is in a poorly studied by deep drilling perspective area of the “Eastern-Caucasus- Mangishlak” oil-and-gas bearing region, where industrial oil-and-gas presence of the Mezozoic sedimentations is stated, both in the water area, and the western and eastern coasts of the Caspian Sea.

The data obtained by drilling of the first preliminary well (wild cat) do not cross out the perspectives of the oil and gas availability of the D-222 block. Of course, one would like to discover the field immediately, after having drilled the first well, but it is a geological prospecting project.

Todate, a lot of specialists and scientists from Russia and Azerbaijan are involved in analyzing in the shortest possible time the whole amount of the geological and geophysical and other specific information obtained and take a decision on further steps on implementation of the agreement on the D-222 block.

In case the results of the second exploration well on Yalama turn out to be similar with the first, whether LUKOIL proceeds with the operations here or be limited by drilling of only two wells?

In the history of discovering the large hydrocarbon fields the cases when rather large and unique deposits were discovered after drilling tens of “dry” wells are not rare.

But there must be a strong confidence that oil and gas are available within this area (structure, block), and the reason of failures lies in our disability to understand the principles of geological structure of perspective fields and possible distribution of hydrocarbons. Any decision should be substantiated and proved.

Is there any necessity in carrying out of any seismic researches within the second well or LUKOIL will derive conclusions based only on the results of the first well?

No, there is no such a need. The 2D seysmic density on Yalama-Samur structure is rather high. By preparation to the prospecting drilling over 6000 running kilometers of 2D seismic and 350 square meters of 3D seismic were interpreted, which allows us to refer the structure to the bank of prepared for the deep drilling.

While drilling the first wild cat we have fully completed the Search Program, approved by LUKOIL and SOCAR. Unique geological and geophysical and core data are received, which coupled with seismic researches, performed prior to drilling enable to make conclusions on geological structure of the Yalama-Samur high on the whole and the D-222 in particular.

We are currently processing the data obtained and close to the year-end we will take a decision on the point of location and purposes of drilling of the second exploration well within the D-222 block in the Caspian Sea. I would like to note with pleasure, a number of scientific and producing organizations of Azerbaijan assist us in this work.

Have all operations on abandoning the Govsany-Zykh project by LUKOIL finished? Namely, legal issues, balance-to-balance receiving and handing over of the equipment and etc?

Operations on the Company’s abandoning the project are accomplished, there are no legal issues left. However, it does not mean, LUKOIL is going to leave Azerbaijan step-by-step. We are currently focused on 2 projects in Azerbaijan: D-222 and В"Shah-Deniz”.

I would like to note especially, that for the development of the second one the agreement was concluded with EBRD in late July on allocating a loan of 180 million USD to the Company. We carry on actively operating in Azerbaijan and confident in the final success of the both projects.

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