Baku, Azerbaijan, Jan.7
By Leman Zeynalova – Trend:
Zenith's oil production target in Azerbaijan for the 2019 calendar year is 1,000 barrels per day, Trend reports citing Canada’s Zenith Energy company, which is the operator of Muradkhanli-Jafarli-Zardab oil fields onshore Azerbaijan.
“The arrival of new equipment including a 260-ton drilling rig, a 100-ton truck-mounted workover rig, and the planned leasing of a 180-ton truck-mounted drilling rig from a local drilling contractor, to be used on the basis of detailed geological and reservoir investigations, is expected to enable the company to achieve this target,” said Zenith Energy.
The company said its current average production is approximately 270 barrels per day generating gross monthly revenue of approximately $450,000.
“The decline in oil production has resulted from the temporary shutting-in of certain wells in the Jafarli and Muradkhanli fields due to uneconomical performance caused by high watercut, and the necessary suspension of production from wells undergoing well preparation for deepening activities in the Jafarli field,” said the company.
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 oil fields. 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 2016.
The term of the REDPSA is 25 years from the date of SOCAR’s approval of the contractor’s development program. The term of each Area may be extended by an additional five years at the option of SOCAR.
The Company sells its oil through SOCAR’s Marketing and Operations Department (“SOCARMO”). A related commission of 1 percent on total oil sales is payable by the Company to SOCARMO.
Zenith holds an 80-percent participating interest in the three fields within the contract area, while SOCAR retains the remaining 20 percent. The agreement is for 25 years, with a potential extension by 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.
The Muradkhanli-Jafarli-Zardab block is located in the Yevlakh-Agjabadi oil and gas region of Imishli district of Azerbaijan. The Muradkhanli field was discovered in 1971, Jafarli - in 1984, and Zardab - in 1981.
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