SOCAR signs agreement on development of Kurovdagh field

Nov 05, 2004 01:00 AM

The State Oil Company of the Azerbaijan Republic (SOCAR) and British Caspian Energy Group signed a Production Sharing Agreement (PSA) on the development of Kurovdagh, one of the largest onshore fields of the country.
The agreement was signed by SOCAR President Natik Aliyev and Vice President of the Caspian Energy Group Hill Mastell.

Addressing the ceremony, Aliyev said that the agreement sets exact obligations for the signatories. Some 36.7 mm tons of oil have been produced from the field since 1955, he noted. Whereas 500 tons of oil was produced daily from the field earlier, now the figure represents 700 tons. Currently, 42 wells are being used for production on the field, Aliyev said.
Mastell, in turn, said that the new agreement will give an impetus to stepping up production in the field. Long-term drilling operations will commence in the field in 2005-2006, as a result of which oil production will increase by 50 % in 2008.

The 25-year contract is the 25th international agreement on developing oil and gas fields of Azerbaijan. The parties to the agreement hold equal shares.
SOCAR and Caspian Energy Group established the Shirvan Oil joint venture in 1997 to develop the Kurovdagh structure, with 51 % and 49 % of shares respectively. However, the parties later decided to sign a Production Sharing Agreement after they grew dissatisfied with the joint venture.

Source: AssA-Irada
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