Chinese Stockholder of Azerbaijan’s Project Says Oil Output in First Half Year has Dropped

Oil&Gas Materials 27 September 2008 14:58 (UTC +04:00)

Azerbaijan, Baku, 27 September/ Trend / In the first half of 2008, CNPC Hong Kong Ltd (CNPCHK) of China has received 448,000 barrels of K& K oil against 547,000 barrels in January to June from the bloc of onshore Kursangi-Garabagli field of Azerbaijan, said report by CNPCHK, holding 25% of the project. K& K has a density of 26 degrees and sulfur of 0.27%.

CNPCHK report said income of the company (after paying taxes) made up $8mln against $5.5mln in the first six months of 2007.

Period of validity of the contract on the development of Kursangi-Garabagli fields makes up 25 years. Stockholders of the project are SOCAR (50%), two Chinese companies - China National Oil & Gas Exploration and Development Corp. (CNODC) and CNPC ( Hong Kong) Ltd. (CNPCHK) holding 25%. Operating company is Salyan Oil.

PSA on field was signed on 15 December 1998 and ratified by the parliament on 16 April 1999. The agreement calls for rehabilitation, exploration and development of contract bloc. The total contract field makes up 450 cu meters. The field is located in Salyan region of Azerbaijan (150km of Baku). SOCAR specialists say remaining oil reserves in the contract field totals to 152mln tons. Period of validity of the contract makes up 25 years.

In 2008, Kursangi-Garabagli operating company plans to drill six development wells. The depth of the wells will make up 3,500m-4,000m. The budget of the company is forecasted at $45.5mln.