Head of RussNeft’s Representative Office in Azerbaijan Appointed

Oil&Gas Materials 3 May 2007 12:45 (UTC +04:00)

Azerbaijan, Baku / corr Trend I.Khalilova / Yuriy Shedrin, Head of the Trade Representation of Russia in Azerbaijan, announced that the Head of the future Representative Office of the Russian oil company RussNeft will arrive in Baku on 3 May. RussNeft, jointly with the SOCAR, is participating in the development of Azerbaijani onshore fields Hovsan-Zykh. The operating company developing these fields will be RussNeft Absheron Investments Limited.

Due to the realization of this project, the company plans to open its representative office in Baku in the near future and the Manager of that office will arrive in Baku on 3 May to resolve organizational issues and hold meetings with relevant bodies.

Russian RussNeft signed a PSA (Production Sharing Agreement) contract with the State Oil Company of Azerbaijan (SOCAR) on the joint development of Azerbaijani onshore oil field Hovsan, Zykh Trend reports. SOCAR has a 25% share in the contract and RussNeft obtained 75% of the PSA contract. In accordance with the Contract, the Company should increase its oil production from Hovsan-Zikh by 1.5 times every two years.

The contract area of the Zykh field is 65,000 sq. m. The remaining oil reserves are 12 mln tons. There are 234 wells in the area. 168 of them have been in operation during different periods of time. Presently, oil production is carried out by means of 10 wells that make up 25 tons and 20,000 cu. m of gas per day. The volume of the extracting water reservoir is 470 cu. m per day.

Hovsan field was discovered in 1948. The current oil production from the field is 260 tons and 900,000 cu. m of gas a day. Oil is produced from 19 wells.

RussNeft OJSC is an oil company which was established in September 2002. Presently, the annual oil production of the Company exceeds 17mln tons. Its extracting reserves are over 630mln tons. Russian company has 30 production assets, 3 oil refineries, one transport enterprise and over 300 petrol stations.