Baku, Azerbaijan, Feb.19
By Leman Zeynalova – Trend:
Canada’s Zenith Energy company, which is the operator of Azerbaijan’s largest onshore block of oil fields Muradkhanli-Jafarli-Zardab produced 22,317 and 70,271 barrels of oil from its assets in Azerbaijan during the three and nine months ended December 31, 2017, said a message from the company.
Production from a number of the company's wells in Azerbaijan was suspended during Q3 as a result of field rehabilitation operations, specifically the installation of electrical submersible pumps and well interventions, said the message.
“Daily production from the field was also affected as a result of the company receiving faulty chemical to treat its oil production from an international chemical supplier. Zenith is now seeking to have the faulty chemical replaced and has ordered new chemical supplies to avoid similar problems being incurred in future,” said Zenith Energy.
The company incurred CAD$3,418k of capital expenditures in the nine months ended December 31, 2017, primarily resulting from the field rehabilitation program underway in Azerbaijan.
"Although we have faced some operational challenges in recent months, I believe these are now being successfully addressed and the Company has a very exciting development journey ahead, coupled with potential transactions to enhance the portfolio and broaden the risk profile of our assets. Accordingly, I look forward to announcing increased production revenue in the next set of quarterly results as we improve well performance and look to grow our daily production levels," said Zenith Chief Executive Officer Andrea Cattaneo.
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 five additional years.
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