Zenith Energy completing well workover onshore Azerbaijan
Canada's Zenith Energy, which is the operator of Azerbaijan's Muradkhanli-Jafarli-Zardab block of onshore oil fields, has commenced the final phase of the Z-21 well workover in the Zardab field on April 9, 2018, Trend learned from the company.
Zenith's recently upgraded A-80 workover rig, operated by the company's field personnel and directed by the Company's international workover specialists, is fully-rigged up and all ancillary equipment has been mobilized to the well location, said the company.
"For the first time, all of the equipment in use is owned by the Zenith Energy group. This equipment is new and has recently been delivered to the Company from China, North America and Azerbaijan," said Zenith.
As announced on February 19, 2018, a coiled tubing intervention, performed in January 2018, had successfully cleaned out the entirety of the tubing string in the well to a depth of 3,670 meters, circulating and drilling out mud and debris that had accumulated since the well was last produced in 1988.
"The company intends to pull the entirety of tubing string from the well and cut the tubing at the relevant depth if any obstruction is encountered. Once this is completed, it will run in hole with a drill bit and clean out the casing to the well's total depth, 3,982 metros. The well will subsequently be put on production. The use of the Company's equipment is expected to significantly decrease the time needed for the workovers, increase efficiency, decrease the cost, and improve operational safety. The Company will provide an update once the workover of Z-21 is completed," 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 oilfields. These fields cover an area of 642.2 square kilometers. Production under the agreement began in August of 2016.
Zenith holds a 80-percent participating interest in the three fields within the contract area, while SOCAR retains the remaining 20 percent. The duration of the agreement is 25 years, with a potential extension of five additional years.
Canadian company optimizes activity in Azerbaijan
Canada's Zenith Energy, which is the operator of Azerbaijan's Muradkhanli-Jafarli-Zardab block of onshore oil fields, had decided to shut-in 31 wells that weren't performing economically, a source in the country's oil and gas market told Trend.
As stated previously, the company's confidence in the Azerbaijan asset remains unchanged, according to the source.
"In this regard, the operating team of Zenith Aran Oil Company decided to close 31 production wells at the Muradkhanli and Jafarli fields, which showed economically ineffective results with an average water content in the recovered reservoir at 99 percent," the source said.
The source noted that it currently had a total of 34 active production wells producing an average daily production of approximately 300 barrels.
"The decision [to close down the wells] was made after an extensive evaluation of the cost analysis. It was decided that the continued production from the above-mentioned 31 wells is contrary to the financial interests of the company. In general, Zenith has 75 production wells," the source said.
The source added that in the future Zenith will systematically review each of the closed wells as part of its work program with a view to increase production either by re-completion of wells or by reducing excess water production.
Azerbaijan's state oil company SOCAR and Zenith Aran Oil Company signed a REDPSA in March 2016 for a block that includes the Muradkhanli, Jafarli and Zardab oilfields. These fields cover an area of 642.2 square kilometers. Production under the agreement began in August of 2016.
Zenith holds an 80-percent participating interest in the three fields within the contract area, while SOCAR retains the remaining 20 percent. The duration of the agreement is 25 years, with a potential extension by 5 years.
The Muradkhanli-Jafarli-Zardab Block is located in the oil region of the Yevlakh-Agjabedi Imishli region of Azerbaijan. The Muradkhanli field, which is included in the contract area, was opened in 1971, Jafarli- in 1984 and Zardab- in 1981.
Wood Mackenzie forecasts about volume of investments in Azerbaijan’s oil sector (Exclusive)
More than $20 billion is expected to be invested in total in Azerbaijan's upstream sector between 2018 and 2025, Ashley Sherman, Principal Research Analyst - Caspian at Wood Mackenzie told Trend.
"Annual investment in Azerbaijan's energy sector peaked in 2014-15, when expenditure was at its greatest for Shah Deniz Phase Two and the Southern Gas Corridor. We do not expect future annual investment to match these highs, as upstream projects will be smaller in scale than the $20 billion Shah Deniz Phase Two," she said.
"In our base case, we expect more than $20 billion to be invested (in total) in Azerbaijan's upstream sector between 2018 and 2025. This includes the new oil platform at ACG (Azeri Central East), for which a Final Investment Decision is targeted in 2019."
However, Sherman believes that several other multi-billion-dollar projects could be confirmed, largely focused on gas: via deals with new partners at Umid-Babek and Karabakh; and full development of Absheron and ACG non-associated (deep) gas.
"In addition, SOCAR GPC would require an additional $4 billion. Renewed exploration in shallow or deep waters could also reveal new oil or gas discoveries," she noted.
However, like any country, Azerbaijan must compete for investment against other attractive oil and gas opportunities in the region and across the globe, Sherman said, adding that cost savings and the profitability of gas exports will be crucial factors.
Wood Mackenzie is an international consulting company providing a wide range of services in the fuel and energy industry. The company was founded in 1973 and its headquarters is located in Edinburgh, Scotland.
In Azerbaijan, Wood Mackenzie works both with representations of its global clients and with local companies.
TANAP to allocate funds for over 400 projects
The Trans-Anatolian Natural Gas Pipeline (TANAP), which is a part of the Southern Gas Corridor project, envisaging transportation of Azerbaijani gas to Europe, will allocate more than $17.3 million for 433 projects in 11 provinces through which it passes, Turkish media reported citing a message from TANAP consortium.
The funds will be allocated for supporting the economic and social development of the regions on the pipeline route, said the company.
About 4,500 grant applications submitted between Feb. 11 and April 20, 2017 were evaluated and it was decided to support 433 projects, according to the message.
TANAP project envisages transportation of gas from Azerbaijan's Shah Deniz field to the western borders of Turkey. The gas will be delivered to Turkey in 2018 and after completion of the Trans Adriatic Pipeline's construction the gas will be delivered to Europe in early 2020.
The length of TANAP is 1,850 kilometers with an initial capacity of 16 billion cubic meters of gas. Around six billion cubic meters of this gas is meant to be delivered to Turkey, with the remaining volume to be supplied to Europe.
Non-Aligned Movement supports Lapis Lazuli transit project
Participants of the Ministerial Conference of the Non-Aligned Movement (NAM), which was held recently in Baku, welcomed the continuous progress in implementation of the Lapis Lazuli transport-transit project on the Afghanistan-Turkmenistan-Azerbaijan-Georgia-Turkey route, the Turkmen Foreign Ministry said in a message.
The NAM final declaration adopted in Baku reflected the initiatives on implementation of large-scale regional infrastructure projects in the transport and energy sectors.
The message also says that the Baku declaration noted efforts to implement the construction of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline and the Turkmenistan-Afghanistan railway.
The Non-Aligned Movement includes 120 states.
In November 2017, the Turkmen parliament ratified the agreement on the Lapis Lazuli project, which had previously been signed in Ashgabat at the level of high-ranking officials of foreign ministries of Afghanistan, Turkmenistan, Azerbaijan, Georgia and Turkey.
It is expected that the railways and highways will connect the city of Turgundi in the Afghan province of Herat with Ashgabat, and then with the Caspian port of Turkmenbashi. The corridor will continue to Baku, then through Tbilisi to Ankara with branches to Poti and Batumi, then from Ankara to Istanbul.