A combine of British Petroleum Co. plc and Den norske stats oljeselskap AS has agreed to pay $40 million for exclusive rights to study development of a Caspian Sea oil field off Azerbaijan and explore a nearby prospect.
Meanwhile, the South Korean press said South Korea and Russia have agreed to form a joint venture to develop undisclosed gas fields in the Yakut Autonomous Republic of eastern Siberia and lay gas pipelines from Yakut to the Korean peninsula.
CASPIAN PROJECT
In a 50-50 joint venture with the former Soviet republic of Azerbaijan, BP-Statoil will evaluate undeveloped Dostlug field, previously known as Kaverochkin, 75 km southeast of Baku. It also will study the adjacent Shak Deniz prospect, formerly known as Shakhovo More.
Dostlug, in 200 m of water, is estimated to hold at least 1 billion bbl of liquids reserves, Eventual reserves may be as much as 2 billion bbl, which could support production of more than 200,000 b/d.
The Shak Deniz license covers about 200 sq km and contains a number of prospects, but it has vet to be tested.
The combine, with interests split two-thirds BP and one-third Statoil, is to complete the work in 2 years in association with Azeri oil and gas agencies Azerineft and Kasmorneftegas.
At the same time, the combine will conduct negotiations for production sharing terms and agreements covering appraisal, development, production, and pipeline transportation. It will make further payment once the Azeri government approves the agreements.
One industry official estimated Dostlug field development costs at $1.5 billion.
BP-Statoil holds a 19% interest in Azeri field in the southern Caspian, where field operator Amoco Corp. is conducting a feasibility study with a view to development.
YAKUT-KOREA
South Korean newspapers quoted an aide to South Korean Energy and Resources Minister Jin Nyum as saying Moscow and Seoul earlier this month signed the joint venture agreement to establish criteria for a 1 year feasibility study.
Under the agreement, the venture's study will focus on gas field development approaches and pipeline proposals. The agreement is to be officially announced when Russian President Boris Yeltsin visits South Korea Sept. 16-18.
The venture is to be capitalized 5050 by the two nations, and participants are to include the Yakut government and South Korea's Daewoo Group.
The aide said Yakut reserves are expected to be a key source of natural gas for South Korea in the next century. The aide quoted Jin as saying Yakut fields covered under the agreement have potential reserves estimated at 350 tcf.
South Korea and North Korea earlier this year agreed to lay a 2,000 km gas pipeline linking them with Russia's Far East (OGJ, July 13, Newsletter).
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