Amoco license tops Caspian Sea action

Amoco Caspian Sea Petroleum Ltd. and the State Oil Co. of the Azerbaijan Republic (Socar) have agreed on terms for licensing of offshore Inam prospect. Amoco said it has agreed with Socar on basic commercial principles for an exploration, development, and production-sharing contract covering an area centered on the Inam prospect, 160 km south of Baku. Meanwhile, Dublin-based Dragon Oil plc has bought a platform-mounted drilling rig, which it intends to transfer to a producing field in the

June 29, 1998

3 min read

Amoco Caspian Sea Petroleum Ltd. and the State Oil Co. of the Azerbaijan Republic (Socar) have agreed on terms for licensing of offshore Inam prospect.

Amoco said it has agreed with Socar on basic commercial principles for an exploration, development, and production-sharing contract covering an area centered on the Inam prospect, 160 km south of Baku.

Meanwhile, Dublin-based Dragon Oil plc has bought a platform-mounted drilling rig, which it intends to transfer to a producing field in the Caspian Sea off Turkmenistan.

Inam

Inam is Amoco's third production sharing deal in Azerbaijan. The company is already involved in Azerbaijan International Operating Co., which is developing Chirag, Azeri, and Guneshli fields, and North Absheron Operating Co., which is slated to drill a second well this year (OGJ, Apr. 13, 1998, p. 34).

Interests in the Inam license are: operator Amoco 25%, Socar 50%, Monument Resources Caspian Ltd. 12.5%, and Moscow-based Central Fuel Caspian Sea Ltd. 12.5%.

The Monument unit is a subsidiary of Monument Oil & Gas plc, London. The independent said the agreement commits Inam's foreign partners to acquire 3D seismic over the 225 sq km block and drill at least two wells during an initial 3-year exploration period.

Monument said Inam is a large structure roughly 30 km offshore, in water 30-300 m deep. Socar has claimed that the Inam structure has the potential to hold more than 1.4 billion bbl of recoverable oil.

Turkmen rig

Dragon has conditionally bought a platform drilling rig for $3.9 million for transfer to Turkmen offshore Block II, where it is 50% interest holder and operator.

The company took control of Block II by buying Dutch independent Larmag Energy NV, which had secured a contract to boost development in Lam and Zhdanov fields on the block.

These fields had been developed under the Soviet regime, with a total of 30 platforms, of which 23 were operational when Larmag took over. The plan was to increase output to 80,000 b/d by 2002 (OGJ, Jan. 30, 1995, p. 36).

The new rig is being refurbished in England and will be transported to the field, where a platform is being prepared to receive it. Drilling operations are expected to start in October.

Graeme Thomson, Dragon's finance director, said: "Dragon is in advanced discussions with a leading international drilling contractor to form a 50/50 joint venture to provide drilling and other services to Caspian operations.

"The introduction of our proposed partner will complement our innovative solution to the shortage of rigs in the Caspian area. Our partner brings drilling expertise to our operations and will enable us to commence and conduct our initial drilling program in a more cost-effective way."

Last week, Elf Aquitaine SA announced a plan under which three foreign operators, including itself, and Socar would fund building of a new jack up rig to get around the lack of suitable rigs in the Caspian (OGJ, June 22, 1998, p. 31).