Baku, Azerbaijan, Oct.2
By Leman Zeynalova – Trend:
Prime cost of oil production at Azerbaijan’s largest onshore block of oil fields Muradkhanli-Jafarli-Zardab, operated by Canada’s Zenith Energy company, is estimated at around $19 per barrel, a source in the country’s oil and gas market told Trend.
The source noted that the prime cost will eventually decrease.
“Zenith is implementing a field rehabilitation program, which envisages repair of wells and introducing various technological solutions. It will eventually lead to not only production growth, but also lower prime cost. If currently, the prime cost of production of one barrel at Muradkhanli-Jafarli-Zardab is $19, the forecasts suggest that it will stand at $8 per barrel in 2020,” said the source.
The source added that the company intends to produce 1,000 barrels per day by March 2018. Currently, the average daily production at the block of fields is approximately 350 barrels of oil.
Azerbaijan’s state oil company SOCAR and Zenith Aran Oil Company signed a Rehabilitation, Exploration, Development and Production Sharing Agreement (REDPSA) in March 2016 for a block that includes the Muradkhanli, Jafarli and Zardab oilfields. These fields cover an area of 642.2 square kilometers. Production under the agreement began in August of 2016.
Zenith holds a 80-percent participating interest in the three fields within the contract area, while SOCAR retains the remaining 20 percent. The duration of the agreement is 25 years, with a potential extension of 5 additional years.
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