Lukoil-SOCAR sign updated Zykh-Govsany agreement

Russian oil company Lukoil signed an agreement with State Oil Co. of Azerbaijan Republic (SOCAR) for the rehabilitation, prospecting, and production sharing (50:50) of the block containing the Zykh and Govsany fields. The first phase of two in the block will cost more than $200 million, said Lukoil.


Russian oil company Lukoil signed an agreement with State Oil Co. of Azerbaijan Republic (SOCAR) for the rehabilitation, prospecting, and production sharing (50:50) of the block containing the Zykh and Govsany fields.

The first phase of two in the block, located on the southern Apsheron peninsula east of Baku, will cost more than $200 million, said Lukoil.

This is a more detailed version of an agreement signed last year (OGJ, Aug. 7, 2000, p. 36).

The Zykh field was brought on stream in 1936. The Govsany field was brought on stream in 1948. There are 15 wells operating in the fields, producing 250 tons/day of oil.

Lukoil estimates recoverable reserves at more than 25 million tons.

A feasibility study by Azerbaijani Research Institute pegs residual oil reserves at 20 million tons.

In a first phase of the project, Lukoil and SOCAR plan to rehabilitate the existing well stock, upgrade oil field infrastructure, and improve environmental safety. After they drill two appraisal wells, they plan to further develop the fields.

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