SOCAR to Work out New Large Offshore Production Contract

Oil&Gas Materials 9 September 2008 13:45 (UTC +04:00)

Azerbaijan, Baku, 9 September/ Trend , E. Ismayilov/ The State Oil Company of Azerbaijan (SOCAR) and French Total plan to begin to work out a new production share agreement on the joint development of Absheron offshore bloc, senior SOCAR official said.

The other companies including BP are also interested in this project. This issue is being discussed at present.

New companies can take part in the project by obtaining share of French company which amounts to 60%. "SOCAR's share will not change," senior SOCAR official said.

SOCAR and French Total signed an agreement at early June on the on major commercial principles on joint development of Absheron offshore field the study of which was ceased by the foreign companies several years ago due to presence of commercially unreasonable hydrocarbon reserves. The project envisages co-operatorship of SOCAR and Total, which will be 40% and 60% respectively in the future contract.

The scheme of the future contract is being developed including perspectives of gas production in the bloc.

If the gas reserves are found in Absheron field, SOCAR will use experience gained in the Shah Deniz project jointly developed with the foreign companies. Currently, Shah Deniz gas is exported via the South Caucasus gas pipeline.

Total, which earlier was a participant of the Absheron project, is well familiar with it. The company has almost defined technical component of the project and know the approximate location of the new exploration well.

Earlier, a consortium of companies operated on Absheron, operated by the US company ChevronTexaco. Total was a partaker in this contract, when the drilling work revealed its reserves as commercially unreasonable.