Azerbaijan approves onshore Padar PSC

Valekh Aleskerov, head of the foreign investment department at the State Oil Co. of Azerbaijan Republic, said recently that the Milli Majlis, the Azerbaijani Parliament, has approved the production-sharing agreement (PSA) for the Padar concession. Aleskerov noted that the Padar PSA is Azerbaijan's first onshore exploration contract. The concession, about 60 miles southwest of Baku in the Kura River basin, covers about 410 sq miles.


MOSCOW�Valekh Aleskerov, head of the foreign investment department at the State Oil Co. of Azerbaijan Republic (SOCAR), said recently that the Milli Majlis, the Azerbaijani Parliament, has approved the proposed production-sharing agreement (PSA) for the Padar concession.

Aleskerov noted that the Padar PSA is Azerbaijan's first onshore exploration contract. The concession, about 60 miles southwest of Baku in the Kura River basin, covers about 410 sq miles.

The deal provides for Kura Valley Development Co. Ltd., a wholly owned subsidiary of Moncrief Oil International Inc., to explore for and develop the Padar concession. The US company plans to carry out a $50 million exploration program over a 3-year period and will sink at least three exploration wells.

The block contains the Padar and Kharami structures, as well as a number of other geologic features of interest, according to Azerbaijan International magazine.

After the partners explore the field, SOCAR will decide how best to proceed with development of Padar, which is postulated to hold as much as 100 million tonnes of oil, according to state estimates. Moncrief will have to pay a total of $12 million in bonuses following ratification of its contract and the beginning of oil production at the field.

Ft. Worth, Tex.-based Moncrief struck a deal with SOCAR for the field last year, during Azerbaijani President Heidar Aliyev's visit to the United States. The company said at the time that it would take a 64% stake in the project, with 20% going to SOCAR and 16% to an Azeri company called ISR; last week, however, it said it would take 80% and SOCAR 20%.

Moncrief is operator of the block.

More in Production Operations