BP halts test drilling work at Inam field due to technical difficulties

BP, the leader of the effort to explore and develop the Inam offshore field, said that it had suspended drilling work due to technical difficulties. Formation pressures at INX-1, the first exploratory well sunk at Inam, has consistently exceeded safety margins and was still rising according to a spokeswoman for BP. As such, the group decided to stop work so as to preserve safety and well integrity standards, she said.
She did not say when drilling at Inam might resume, though a source close to the consortium was quoted as saying that work would remain on hold for at least two months and perhaps for more than a year. The spokeswoman for BP stressed, however, that the partners had no plans to abandon the project. The consortium is eager to explore Inam and will use the down time to look into alternative engineering solutions, she said.
The source told that the group would either have to redesign the INX-1 well's structure to reduce formation pressures or begin sinking a new well in a different location. In any case, the source noted, the consortium will not be able to resume drilling until a rig becomes available.

BP began sinking INX-1 with the Dede Gorgud semi-submersible rig but was forced to halt work last December because formation pressures at the well proved too high for this rig. It resumed drilling operations in July once Istiqlal, a larger rig, became available. However, within two weeks it became apparent that Istiqlal was also incapable of coping with the high pressures at the well site.
The INX-1 test shaft is the first of three that will be drilled at the Inam field. The license to the deposit covers a 225 sq km-area located about 40 km offshore. Inam may hold as much as 1 bn barrels of crude oil but also appears to contain some natural gas as well. Development of the concession may require up to $ 3 bn in investments.

Russia's LUKoil was the first foreign company to bid for the Inam field. However, the State Oil Company of Azerbaijan (SOCAR) never accepted its offer and in July of 1998 signed a 25-year contract with British Petroleum. BP, which has since merged with the US oil company Amoco, has a 25 % stake in the project, and the remaining interest is split between SOCAR, with 50 %, and Shell, with 25 %.
Shell acquired a 12.5 % interest in Inam from Lasmo of Great Britain in 1999, along with another 12.5 % from Central Fuel Caspian Sea, a subsidiary of the Moscow-based Central Fuel Company, or CFC. (Lasmo inherited its stake from Monument Oil and gas, another British company, in a merger transaction completed in the fall of 1999.) Shell paid $ 18 mm for each 12.5 % stake. The purchases marked the company's first investment in Azerbaijan in almost 90 years.