LUKoil ready to sign PSA with SOCAR

Jan 09, 2001 01:00 AM

LUKoil announced that it was ready to sign a new production-sharing contract SOCAR. The commercial terms of the deal for the Hovsanny-Zykh concession have been set, LUKoil's First Vice President Ravil Maganov said on December 21.
The deal will be signed on January 9 or 10 during Russian President Vladimir Putin's official visit to Azerbaijan, Maganov said. He noted, however, that LUKoil's President Vagit Alekperov was expected to initial the contract on December 21 during a trip to Baku. LUKoil will spend $ 250 mm to finish rehabilitation work at the Hovsanny and Zykh fields, he added.

The Russian company plans to develop its onshore contract area through a 50-50 joint venture with SOCAR. The fields, which cover about 128 sq km on the southern part of the Abzheron peninsula, have been subjected to development for decades, but LUKoil believes they may contain 17-20 mm tons of recoverable crude oil.
The PSA that was drawn up by the two companies last summer calls for the Russian partner toboost oil output at the Hovsanny-Zykh block by 150 % within two years time. The fields were as of last June yielding about 1,760 bpd of crude. LUKoil has said it will use output from Hovsanny-Zykh to supply its gasoline filling stations in Azerbaijan.

Source: NewsBase
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