Ramco sees PSA ratified by parliament of Azerbaijan

Ramco, an independent energy company focused on the Caspian region and eastern Europe, announced that it has received ratification from the Milli Majlis (the state Parliament of Azerbaijan) for the Muradkhanli Production Sharing Agreement. Ratification gives this agreement formal legal status as one of the laws of the land, and will now allow Ramco to proceed with the Rehabilitation Program.

Ramco will immediately commence a major program of environmental studies on the area. The Rehabilitation Program is expected to produce new incremental oil by mid 1999. The Company is planning to drill two new wells in the rehabilitation area during the second half of 1999, in order to further appraise the reservoir, subject to the approval of the programs by SOCAR.
Ramco signed a Production Sharing Agreement (PSA) July 21, 1998 for the rehabilitation, exploration and development of the Muradkhanli acreage, which includes the Muradkhanli, Jafarli, Zardab fields, and for further exploration within the 565sq. km acreage. This acreage is believed to hold Azerbaijan's largest onshore field. Ramco's feasibility study concluded that there are at least 5 bn barrels of oil in place.

The PSA gives Ramco a 50 % interest in Muradkhanli, Jafarli and Zardab fields in the contract area, with SOCAR retaining 50 %. In consultation with SOCAR, Ramco will be reviewing the possibility of introducing an additional partner in due course.

The Muradkhanli field, which was discovered in 1969, is 110 miles south-west of Baku. The field is located adjacent to the Azerbaijan International Operating Company's (AIOC) western pipeline route that is expected to be operational early in 1999. Muradkhanli is connected to the railway that links Baku to Poti and Batumi on the Georgian Black Sea coast. This rail link is currently being used by Chevron to export part of its Tengiz production from Kazakhstan, and to transport production from Turkmenistan.