Zenith Energy to spend $3.5 M for upgrading work at Azerbaijani fields
Baku, Azerbaijan, July 31
By Leman Zeynalova – Trend:
During 2019 and 2020, it is estimated that $3.5 million will be spent upgrading the gathering system and central facilities in Azerbaijan to improve safety, efficiency and handle higher production rates, Trend reports citing the company, which is the operator for development of Muradkhanli-Jafarli-Zardab oil fields onshore Azerbaijan.
Reportedly, from 2020 through 2024, 3D seismic programs are expected to be run to fully delineate the various pools and formations to optimize the drilling locations.
“Development drilling will commence in 2019 and continue to 2035. It has been estimated that each well in the proved case will cost $4.3 million. This cost will include the direct cost of materials, fuel, salaries, etc. to drill the well as well as an allocation for the purchase of one drilling rig, well completion and tie in,” said the company.
Each well in the proved plus probable case is expected to cost $5 million, according to Zenith Energy.
“In all, 147 wells are expected to be drilled, 58 of these are anticipated to be horizontal wells (legs). Most horizontal wells will have two legs of about 1,600 m each. For the purpose of estimating costs, each leg is considered to be a well with a cost of $5 million,” 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.
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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