Baku, Azerbaijan, April 12
By Maksim Tsurkov – Trend:
Canada’s Zenith Energy, which is the operator of Azerbaijan’s Muradkhanli-Jafarli-Zardab block of onshore oil fields, had decided to shut-in 31 wells that weren't performing economically, a source in the country's oil and gas market told Trend.
As stated previously, the company's confidence in the Azerbaijan asset remains unchanged, according to the source.
"In this regard, the operating team of Zenith Aran Oil Company decided to close 31 production wells at the Muradkhanli and Jafarli fields, which showed economically ineffective results with an average water content in the recovered reservoir at 99 percent," the source said.
The source noted that it currently had a total of 34 active production wells producing an average daily production of approximately 300 barrels.
"The decision [to close down the wells] was made after an extensive evaluation of the cost analysis. It was decided that the continued production from the above-mentioned 31 wells is contrary to the financial interests of the company. In general, Zenith has 75 production wells," the source said.
The source added that in the future Zenith will systematically review each of the closed wells as part of its work program with a view to increase production either by re-completion of wells or by reducing excess water production.
Azerbaijan’s state oil company SOCAR and Zenith Aran Oil Company signed a 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 an 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 by 5 years.
The Muradkhanli-Jafarli-Zardab Block is located in the oil region of the Yevlakh-Agjabedi Imishli region of Azerbaijan. The Muradkhanli field, which is included in the contract area, was opened in 1971, Jafarli- in 1984 and Zardab- in 1981.