A unit of Pennzoil Co., Houston, is scheduled to operate a development program that could more than double oil production from Guneshli field off Azerbaijan in the southern Caspian Sea.
Under agreements signed in Baku, Pennzoil Caspian Corp., Ramco Energy Ltd. of Aberdeen, Scotland, and state oil company Azerneft will have exclusive right to jointly develop the field. Partners' shares and other project details are to be laid out in the final development plan, expected by yearend.
James L. Pate, Pennzoil president and chief executive officer, said the deal to advance Guneshli development is a key step in the company's strategy to increase international oil and gas operations.
"Our experience in offshore production and development fits well with the objectives of the Guneshli field program," Pate said. "We have developed a strong relationship with our Azerbaijani partners, and we believe these agreements provide the framework for this important national asset to realize its full potential."
Guneshli, on production since the early 1980s, is about one-third developed. It produces 130,000 bid of oil and a small amount of gas from Miocene pay at about 10,000 ft. Recoverable reserves are estimated at 1.4 billion bbl.
As outlined in preliminary plans, the international combine will increase production from today's Guneshli wells with a comprehensive workover and pressure maintenance program. In addition, the rest of the field is to be developed through a multiyear drilling program and installation of more platforms.
Water depths are 250-800 ft.
Pennzoil plans to begin work immediately on an offshore gas gathering and compression system. Although only a minor part of the preliminary field development plan, it will allow Azerbaijan to begin using Guneshli gas production rather than rely on imports.
Design, capacity, and beginning and end of the pipeline system are to be detailed in the final development plan.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
