Union Texas expands its Caspian-area position

Union Texas Petroleum's Concession [99,474 bytes] Union Texas Lok Batan Ltd., a unit of Union Texas Petroleum Holdings Inc., Houston, has acquired 75% of New Jersey-based BMB Oil Inc.'s 100% interest in a production-sharing agreement (PSA) with the State Oil Co. of Azerbaijan Republic (Socar). BMB retains a 25% interest in the concession, which Union Texas will operate.

April 27, 1998

2 min read

Union Texas Petroleum's Concession [99,474 bytes]

Union Texas Lok Batan Ltd., a unit of Union Texas Petroleum Holdings Inc., Houston, has acquired 75% of New Jersey-based BMB Oil Inc.'s 100% interest in a production-sharing agreement (PSA) with the State Oil Co. of Azerbaijan Republic (Socar).

BMB retains a 25% interest in the concession, which Union Texas will operate.

Union Texas also will provide technology for an enhanced oil recovery project and an onshore exploration program of the 225,000-acre block, West Absheron, which lies 30 miles west of Baku (see map). Terms of the transaction were not disclosed.

Although five fields were discovered on the block during the 1930s through the 1950s, they produce only a combined 200 b/d, says Union Texas. The producing fields are Korgyoz, Kiziltepe, North Karadag, Shongar, and Umbaki.

Crude oil produced in the concession area is 20-30° gravity and sweet.

"This new venture is part of an important, long-term corporate initiative to develop a meaningful presence for Union Texas in the Caspian Sea region," said Union Texas Chairman John Whitmire. "This venture on the West Absheron block provides us with entry into an oil play onshore Azerbaijan that offers both relatively low-risk exploitation potential and exploration upside."

BMB signed a 20-year PSA with Socar late in 1994 that was amended the following year to include production from two additional fields. The PSA is renewable for 10 more years.