19-11-03 A project to develop the Absheron potential oil and gas structures in the Azerbaijani sector of the Caspian Sea can officially be considered closed. The Baku office of ChevronTexaco, the project operator, told that talks with the State Oil Company of Azerbaijan (SOCAR) on the fate of Absheron ended with a compensation payment for the second non-drilled well, envisaged by the contract.
"With the compensation payment, the partners -- ChevronTexaco and TotalFinaElf of France -- met their project obligations and no more work on the project will be carried out," a source said.

The company refused to say how much compensation would be paid. ChevronTexaco does not plan to leave Azerbaijan, which has "great potential in the oil sector," the office said. The company is studying market opportunities in order to continue its work in the country.
ChevronTexaco decided to pull out of the Absheron project in February 2003 because commercial reserves were not discovered when the first well was drilled in the summer of 2001. Initially, the company predicted Absheron would have gas supplies of 300 bn cm and oil reserves of 220 mm tons.

SOCAR says the well was not drilled where it should have been because the project operator did not follow recommendations. Azerbaijani geologists say the structures have reserves of 1 tcm to 3 tcm.
Absheron was ChevronTexaco's only project in Azerbaijan. TotalFinaElf is involved in other projects, including the Shah Deniz gas condensate field and the pipeline company BTC. A PSA contract to develop the Absheron structures was signed in August 1997 in Washington. SOCAR held 50 %, ChevronTexaco 30 %, and TotalFinaElf 20 %. Proposed investment was $ 3.5 bn.