Chinese Shareholder Divulges Volume of Losses from Big Oil and Gas Onshore Project in Azerbaijan

Oil&Gas Materials 13 June 2008 14:22 (UTC +04:00)

Azerbaijan, Baku, 13 June / Trend / In 2007, some 1.061mln barrels oil accounted for CNPC Hong Kong Ltd, against 1.082mln barrels in 2006, within the project to develop bloc of onshore Azerbaijani fields Kursangi-Karabakhli, said the Company that holds 25% share in the project.

The profit (after tax payment) made up $12.24mln during this period, against $11.42mln in 2006. The rise totaled $817,000 or 7.15% against the previous year.

In 2007, the operations in Kursangi-Karabakhli cost $18.6mln against $9.5mln in 2006.

CNPC is also the shareholder of the operating company to develop South-West Gobustan contract field. In 2007 the Company faced losses worth $2.82mln in this project, against $15.79mln in 2006. The losses in 2007 are attributed to the low level of oil and gas sale produced in this field. "The future plans on the development of this field depend on the results of a deeper study of data obtained from the field," the report said. Earlier 2D and 3D seismic investigations were conducted in the contract field, the interpretation of which is being carried out present.

The period of the agreement to develop Kursangi-Karabakhli is 25 years. The shareholders of the project are SOCAR (50%), two Chinese companies - China National Oil & Gas Exploration and Development Corp. (CNODC) and CNPC ( Hong Kong) Ltd. (CNPCHK) with 25% each. The operating company Kursangi-Karabakhli plans to drill 6 exploratory wells in 2008. Their depth to total about 3,500-4,000m. The budget of the company for 2008 amounts $45.5mln.

The South-West Gobustan is developed by operating company GOC in line with the PSA signed with SOCAR. The company began selling free gas in February 2006. In GOC, 80% of its stock belongs to the Commonwealth Gobustan Limited and 20% to SOCAR. In Commonwealth Gobustan Limited, 37.17% of its stock belongs to Arawak Energy and 62.83% to the China National Petroleum Company.