Azeri parliament ratifies oil contract with Exxon.

Nov 14, 1997 01:00 AM

Azerbaijan's parliament has ratified the republic's agreement with Exxon, providing for Exxon's participation in a $ 2 billion oil project in the Caspian shelf.
Exxon signed this contract with Azerbaijan's State Oil company (GNKAR) on August 1 during President Geidar Aliyev's first visit to Washington.
Under its terms, Exxon must pay $ 10 mm for participation in the project within 30 days since the document is ratified. It will pay $ 1 mm for each 100 million barrels of the discovered oil.
After daily oil production reaches 12,000 barrels, Exxon will receive a bonus worth $ 40 million. Also, it will get 2,000 dollars per sq km of the contract space which is 280 sq km.
The oil-field, Nakhichevan, is located 90 km south of Baku at the depth of 400-600 metres below sea level. Oil-rich layers are 5,000 metres below sea level. Local geologists had discovered the deposit in 1960 but the partners are still to prospect it.
The prospecting will last for 4 years, during which 3-D seismograms of the whole area should be obtained and at least 2 wells should be drilled. If no oil is discovered, the partners will bore at least 1 more well in the next 2 years. Exxon said it would cover all prospecting costs.

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