The State Oil Company of Azerbaijan (SOCAR) and Russian Oil Company RussNeft are carrying out different procure stages within the framework of earlier signed PSA on the joint development of Azerbaijan onshore oil field Hovsan Zykh, Trend reports.
The amount of the investments to the field will directly depend on the drilling program of the project. The investments will approximately amount to $150mln.
The Baku office of RussNeft will open in February-March 2006. Russian RussNeft stroke a PSA (Production Sharing Agreement) with SOCAR on the joint development of Azerbaijani onshore oil field Hovsan Zykh Trend reports. SOCAR share in the contract is 25%, RussNeft obtained 75% of the PSA contract.
In accordance with the Contract, the Company should increase its oil production from Hovsan-Zykh in 1.5 times every two years.
Meanwhile, SOCAR informed that Azerbaijan is going to ratify the contract at the parliament in its spring session.
The contract area of Zykh field is 65,000 square meters. The remaining oil reserves are 12 mln tons. There are 234 wells on the area. 168 of them have been operated in different periods of time. Presently, oil production is carried out by means of 10 wells that makes up 25 tons and 20,000 cubic meters of gas per day. The volume of the extracting water reservoir is 470 cubic meters per day
Hovsan field was discovered in 1948. The current oil production from the field is 260 tons and 900,000 cubic meters of gas a day. 19 of them produce oil.
RussNeft OJSC, an oil company, which was established in September 2002. Presently, the annual oil production of the Company exceeds 17 mln tons. Its extracting reserves are over 630 mln. tons. Russian company has 30 production assets, 3 oil refineries, one transport enterprise and over 300 petrol stations.