Azeri president signs three PSA deals

Azerbaijan's President Heydar Aliyev has signed three production-sharing agreements with foreign firms during an official visit to London. The contracts include two offshore licenses, awarded to BP Exploration Operating Co. Ltd. and Amoco Corp., and an onshore license awarded to Ramco Energy plc, Aberdeen. BP secured a PSA covering the undrilled Alov, Araz, and Sharg prospects in the Caspian Sea. The contract area covers 1,400 sq km and lies 120 km southeast of Baku in 300-800 m of water.

July 27, 1998

3 min read

Azerbaijan's President Heydar Aliyev has signed three production-sharing agreements with foreign firms during an official visit to London.

The contracts include two offshore licenses, awarded to BP Exploration Operating Co. Ltd. and Amoco Corp., and an onshore license awarded to Ramco Energy plc, Aberdeen.

BP PSA

BP secured a PSA covering the undrilled Alov, Araz, and Sharg prospects in the Caspian Sea. The contract area covers 1,400 sq km and lies 120 km southeast of Baku in 300-800 m of water.

License interests are operator BP 15%, Statoil AS 15%, and State Oil Co. of the Azerbaijan Republic (Socar) 40%, leaving 30% to be allocated by Socar later. BP committed to drill three wells on the block by 2001, with up to five additional exploration wells by 2004, and to acquire 3D seismic data. BP said its share of the exploration commitment will cost $75 million.

The operator intends to drill the first well on the block next year, although western-standard rigs are scarce in the Caspian region. The company already produces 70,000 b/d of oil from Chirag field and is drilling a wildcat on the Shah Deniz block.

Amoco PSA

Amoco's PSA award was for the Inam block 160 km south of Baku, which it secured last month (OGJ, June 29, 1998, p. 34).

Interests are operator Amoco 25%, Monument Oil & Gas plc of London 12.5%, Socar 50%, and Moscow-based Central Fuel Caspian Sea Ltd. 12.5%.

The block covers 225 sq km.

Amoco has committed to acquiring 3D seismic data and drilling at least two wells during an initial 3-year exploration period.

Ramco PSA

Ramco secured a PSA for rehabilitation, development, and further exploration in Muradhanli, Jafarli, and Zardab fields 110 miles southwest of Baku. The contract area covers 565 sq km and is owned 50% by operator Ramco and 50% by Socar. Ramco says it will consider looking for an additional license partner in due course.

The fields have been in production since 1969 and, by the end of 1997, had yielded 20 million bbl of oil, at a peak rate of 9,000 b/d. Production has been mainly from upper Cretaceous formations, but Ramco says the fields' middle Eocene and Paleocene-Eocene structures are mainly undeveloped.

The operator says the middle Eocene reservoirs have flowed up to 3,000 b/d of oil on test. Development could turn the fields into Azerbaijan's largest onshore producer, it reckons.

Rehabilitation work will start immediately, with first incremental oil expected by mid-1999. Later next year, Ramco intends to collect 3D seismic data over the fields and to drill two exploration wells.