Foreign Company Fails to Coordinate PSA with SOCAR

Oil&Gas Materials 16 December 2006 11:27 (UTC +04:00)

Eurasia Energy Limited announced on the completion of the efficiency term of Memorandum on Mutual Understanding with the State Oil Company of Azerbaijan (SOCAR), signed on December 7, 2005.

Eurasia Energy informed Trend that commercial talks over Exploration, Rehabilitation, Development and Production Sharing Agreement ("ERDPSA") on Alat-Daniz field were to complete by December 7, 2006, while the sides failed to meet the schedule in achievement of agreement on major commercial principles.

Eurasia Management continues talks with SOCAR on possible extension of the memorandum for the coordination of major commercial principles.

The company concluded necessary survey for the development of a plan on the offshore field development. The efficiency term of a Memorandum of Intention between SOCAR and Eurasia Energy is near the end, but it can be extended.

In September managers of the Company, representatives of TRACS International Consultancy Ltd. and Genesis Oil and Gas Consultants Ltd. paid two visits. During the visit they hold meetings with the leadership of the SOCAR, geologists and engineers, held inspection of platforms in the field, pipelines and specialized vessel.

The Block includes the production of Alat-Deniz oil and gas field and a string of seven prospective exploration structures (Hamamdag-Deniz, Garasu, Sangi-Mugan, Ulfat, Aran-Deniz, Dashly and Sabayil) moving in a south-easterly direction from the coast to seventy kilometers offshore.

Eurasia Energy Limited attracted TRACS International Consultancy Ltd. and Genesis Oil and Gas Consultants Ltd. to advise and consult with management of the project.

Water depths are predominantly up to twenty meters and reach a maximum of fifty meters at the far end of the Block. The Alat-Deniz field was discovered in 1983 and until mid-2006 had produced approximately 12.5 million barrels of oil and 1 billion cubic meters of gas.

According to SOCAR, the remainder of recoverable oil reserves at Alat Daniz comprises of 14 million barrels of oil and 1 billion cu. m. of gas. The major productive zones lie at a depth of 3700-4500m.