Baku, Azerbaijan, May 25
By Maksim Tsurkov - Trend:
Canadian Zenith Energy, which is the operator of the Muradkhanli-Jafarli-Zardab onshore oil fields’ block in Azerbaijan, intends to start drilling its first own production well at the block in late 2018, a source in the country's oil and gas market told Trend May 25.
The source said the company plans to start drilling the well at the end of the year.
"Currently, Zenith produces about 300 barrels of oil per day from 34 active wells. The company aims to reach the production level of 1,000 barrels per day by the end of the year and then continue to increase production. For this purpose, the existing wells are being repaired, but the company expects to start drilling its own new wells and subsequently conduct exploration work. At the same time, the current potential of the block of fields allows to conduct production from about 75 wells," the source said.
The source said that to start drilling the company needs a new more powerful drilling rig.
"Negotiations on the acquisition of the drilling rig under the leasing agreement are conducted with the Italian manufacturer," the source said.
The contract on the share division of production, recovery, development and exploration on the land block of oil fields "Muradkhanli", "Jafarli" and "Zardab" was signed between Zenith and the Azerbaijani state company SOCAR in March 2016. The production under the contract started in August 2016.
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. Zenith Energy Ltd established its subsidiary company Zenith Aran Oil Company Ltd for production operations in these three fields. 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.
The total area of the Muradkhanli, Jafarli and Zardab fields is 642.2 square kilometers, and according to the contract, it is divided into rehabilitation and exploration territories.
In the fields, along with oil, gas is also produced in small volumes, which is used for economic and production activities.
The Muradkhanli-Jafarli-Zardab block is located in the Yevlakh-Agjabedi oil and gas region of Imishli district of Azerbaijan.
The "Muradkhanli" field was discovered in 1971, "Jafarli" - in 1984, and "Zardab" - in 1981.
---
Follow the author on Twitter: @MTsurkovTrend