Union Texas acquires interest in PSA with SOCAR

Apr 20, 1998 02:00 AM

Union Texas Lok Batan Limited, an indirect subsidiary of Union Texas Petroleum, has entered into an agreement with BMB Oil to acquire 75 % of BMB's interest in a production sharing agreement with the State Oil Company of the Azerbaijan Republic (SOCAR).
Union Texas will serve as operator of the enhanced oil recovery project and onshore exploration program. The concession area, known as the West Apsheron block, totals approximately 225,000 acres and is located 30 miles west of Baku, the capital of Azerbaijan. The transfer has been approved by SOCAR.
"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 and CEO John Whitmire. "This venture on the West Apsheron block provides us with entry into an oil play onshore Azerbaijan that offers both relatively low risk exploitation potential and exploration upside."
Union Texas will provide technology and expertise to re-establish production from existing fields in the West Apsheron block. The venture plans to drill 3 wells in these fields in 1998 and also expects to initiate an exploration program by evaluating several attractive leads and prospects beginning in late 1998. Initial reserve bookings are not anticipated until the work program is well underway.

- BMB signed the PSA with SOCAR on August 10, 1994. The PSA took effect on May 19, 1995, and was amended on December 22, 1995 to include production from two additional fields.
- The 20-year PSA contract is renewable upon mutual agreement with SOCAR for 10 additional years.
- The fields mentioned in the PSA were discovered from the 1930s to the 1950s.
- Currently, the five producing fields combined produce approximately 200 bpd. The producing fields are Korgyoz, Kiziltepe, North Karadag, Shongar and Umbaki.
- The five producing fields have already produced approximately 24 million barrels of oil.
- Union Texas' exploration plan is to test one prospect already identified, then develop additional leads into future prospects.
- The quality of crude oil in the concession ranges from 20 degrees to 30 degrees API gravity. The average crude oil gravity is expected to be 25 degrees to 28 degrees. The oil is considered to be "sweet" and very low in corrosive chemical compounds.

The project in Azerbaijan strengthens Union Texas' position in Central Asia, where the company is the operator for an exploration joint venture in Kazakhstan with the Oman Oil Company.
Union Texas has offices in Almaty and Atyrau, Kazakhstan. The company recently opened offices in Baku, Azerbaijan.

One of the largest independent producers located in the U.S., Houston- based Union Texas Petroleum Holdings, Inc. explores for and produces oil and gas overseas primarily in the U.K. North Sea, Indonesia, Venezuela, Pakistan and other strategic areas.
The company has petrochemical operations in Louisiana.

BMB Oil, Inc. is incorporated in New Jersey and is wholly ownedby Mr. Ali Riza Bozkurt. New Jersey-based BMB Oil is affiliated with United BMB Group through common ownership. BMB also has signed a contract for the first integrated project to build a power station and operate the Alibekmola oil field with the German firm, Siemens, in Aktubinsk, Kazakhstan. BMB has offices in Almaty, Kazakhstan.

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