Signing of PSA-contracts on small onshore fields cuts cost of SOCAR production

Oil&Gas Materials 3 June 2010 15:37 (UTC +04:00)

Azerbaijan, Baku, June 3 / Trend N.Ismayilova /

One of the main objectives of the State Oil Company of Azerbaijan Republic (SOCAR) is to reduce the total cost of oil and gas production, SOCAR President Rovnag Abdullayev said today.

The company directs relatively small onshore fields, on which the cost of extracting oil and gas is high, to the joint development with foreign companies under PSA-contracts. The high cost of oil production from these fields leads to an increase in total production costs for the company.
The cost and expenses of SOCAR to develop them actually reduced when transferring the development of small fields to foreign companies.

"Production on these fields cost very high, which in turn affects the overall production cost for the entire company. A decrease is observed in total production costs of SOCAR when directing these fields in the joint development. After all, we do not carry the financial costs and state gets its share in the form of oil under these contracts," Abdullayev said.

According to Abdullayev, SOCAR favors projects that focus on the exploration of new structures to attract more investment to increase reserves. In particular, it concerns the future of offshore structures and deposits.

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