Azerbaijan seeks help to redevelop fields

Redevelopment Candidates [44,733 bytes]

Azerbaijan is seeking outside help in redeveloping some important onshore oil fields.

State Oil Co. of the Azerbaijan Republic (Socar) is offering data packages on four mature onshore fields in an attempt to solicit foreign investment in their redevelopment.

The fields-all near Baku-are Bibi-Eybat, Buzovni-Mashtagi, Kala, and Zirya (see map).

A team of Socar and GeoQuest officials recently made presentations to a number of U.S. and European exploration and production companies. According to Philippe Simon, sales and marketing manager for GeoQuest Reservoir Technologies, Henley-On-Thames, U.K., interest in the fields has thus far been "surprisingly high."

Socar hopes to sign contracts with foreign E&P companies late this year, with work to begin in 1998.

Redevelopment

"Production levels from the fields have been declining for some time," said Vitaly Begliarbekov, deputy general manager of the foreign investments division of Socar.

"The natural decline in oil production has been exacerbated by a lack of money to repair inactive wells to return them to production," he added.

GeoQuest and Socar conducted a World Bank-sponsored field study to examine the redevelopment potential of the fields, all of which have high water cuts and low production rates. The results of the study indicated that a variety of methods could be used to increase production from the fields.

These techniques ranged from repairing inactive wells to applying modern operating practices, which the current operators-Bibi-Eybat & Tagiev Field Management Cos.-say are too expensive for them to implement.

"Many of the reservoir horizons have a low well spacing and present an excellent target for additional drilling," said Simon.

Exploration opportunities

Socar also says that a number of exploration prospects surround the four fields. These are mainly stratigraphic traps in the lower Pliocene horizons and structural traps in the underlying Miocene sediments, according to GeoQuest.

Begliarbekov explained that Azerbaijan's petroleum legislation allows Socar to negotiate contracts individually with field operators. Socar has established several such joint ventures to develop onshore oil fields.

"Naturally, Socar is prepared to consider most types of contracts for development of these onshore fields," said Begliarbekov, "including service contracts, PSAs (production-sharing agreements), and JVs (joint ventures)."

Socar and GeoQuest Reservoir Technologies have prepared an "information memorandum" that is available upon request. The firms also have set up data rooms in Houston and Henley-on-Thames.