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One More Oil Company Joins EITI

Oil&Gas Materials 31 October 2006 16:35 (UTC +04:00)

Binagadi Oil, an operating company involved in the development of Bingadai onshore field of Azerbaijan, has signed an act on joining to a memorandum in connection with the application of the Extractive Industry Transparency Initiative (EITI) in Azerbaijan. The State Oil Company of Azerbaijan (SOCAR) informed Trend that the company received an invitation to join the memorandum, from the EITII commission.

The number of oil and gas companies that joined the Memorandum reached 23. The Memorandum was signed on November 24, 2004 by 21 foreign and local extractive companies, including big companies such as the SOCAR, BP Azerbaijan, Exxon, Statoil, Total, Lukoil, Unocal, Shell, Devon Enerji. Inpex Azerbaijan company has joined the Memorandum on July 19, 2005.

Binagadi Oil has recently begun its activities. It can participate in the development of previous reports under the EITI. After the signing of an act on joining, Binagadi Oil, is to present a report on transference to the Government within the framework of the 5th reviewing period covering the first half-year of 2006

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An agreement on exploration, rehabilitation, development, and product sharing on the bloc of the onshore fields Binagadi was signed between SOCAR and AZEN (a joint company established by Turkey's AZEN and Azerbaijan's AzPetrol equal product sharing in Baku on June 18, 2006. SOCAR's share in this agreement is 25%, AZEN`s - 75%. At the same time, the financing of SOCAR`s share will be carried out by AZEN.

In accordance with this agreement, AZEN is obliged to increase the daily oil production on the contract bloc in one and a half time within the next three years, as well as repay a bonus at a rate of $1 m. The bloc with the total area of 4.3 thousand hectares has been developed since 1896. Its total geological reserves make up 132 m. tons of oil, its recoverable resources 12.8 m. tons. At present, the oil production reaches 286 tons of oil a day. (106.000 tons were produced in 2003).

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