Russian Company Pays Hovsani-Zykh Bonus to SOFAZ
Azerbaijan, Baku / corr Trend / The State Oil Fund of Azerbaijan (SOFAZ) received on November 6, 2007 the bonus payment of $2 mln from RUSSNEFT Apsheron Invesments Limited in accordance with the Agreement signed between Azerbaijan Government and extractive company on the rehabilitation, development and production sharing for the block including the Zykh and Govsany oil fields in the Azerbaijan Republic. Bonus paid following the Effective Date.
The participants of Zykh and Govsany project are RUSSNEFT Apsheron Invesments Limited and State Oil Company of Azerbaijan Republic.
Russian RussNeft signed a PSA (Production Sharing Agreement) contract with the State Oil Company of Azerbaijan (SOCAR) on the joint development of Azerbaijani onshore oil field Hovsan, Zykh Trend reports. SOCAR has a 25% share in the contract and RussNeft obtained 75% of the PSA contract. In accordance with the Contract, the Company should increase its oil production from Hovsan-Zikh by 1.5 times every two years.
The contract area of the Zykh field is 65,000 sq. m. The remaining oil reserves are 12 mln tons. There are 234 wells in the area. 168 of them have been in operation during different periods of time. Presently, oil production is carried out by means of 10 wells that make up 25 tons and 20,000 cu. m of gas per day. The volume of the extracting water reservoir is 470 cu. m per day.
Hovsan field was discovered in 1948. The current oil production from the field is 260 tons and 900,000 cu. m of gas a day. Oil is produced from 19 wells.