First oil from Caspian Chirag-field

Nov 12, 1997 01:00 AM

First oil from the Chirag field in the Caspian Sea marks a major milestone for the Azerbaijan International Operating Company (AIOC).
Amoco and British Petroleum (each with a 17 % stake) lead the AIOC consortium of 11 international energy companies, which is working with SOCAR, the state oil company of Azerbaijan, to develop the Chirag and Azeri fields and the deepwater portion of the Gunashili field in the Caspian Sea. The fields contain an estimated 4 billion barrels of oil. The $ 12 billion project is expected to reach peak production -- more than 800,000 bpd -- around 2008.
"First oil is a significant achievement for Amoco's business interests in Azerbaijan and the Caspian region, which we have identified as one our key growth areas world-wide," said Charles Pitman, president and chairman of Amoco Eurasia Petroleum Corporation.
In addition to its participation in AIOC, Amoco is the lead company (30 % interest) in the North Absheron Operating Company, a consortium exploring for oil in the Ashrafi and Dan Ulduzu prospects in the Caspian Sea. Amoco is also negotiating with SOCAR for other rights in the South Caspian Sea.
The Caspian region -- with its tremendous energy potential -- will play an important role in supplying oil to the world markets well into the 21st century, according to Pitman. Estimates of 100 to 200 billion barrels of crude oil resources are common.
"The United States clearly has a national interest in developing diversified sources of energy," Pitman said. "We believe that oil from the Caspian basin offers the U.S. a prime opportunity for diversification. It will also enhance economic development in the region."
Given these important strategic and commercial factors, Amoco last month urged the U.S. government to increase its involvement in the region. Testifying before a U.S. Senate Foreign Relations subcommittee October 23, Pitman called on the United States to support efforts to establish a commercially viable and secure main export pipeline to carry Caspian oil to western markets; work to resolve regional conflicts; and encourage resolution of the legal status of the Caspian Sea in a way that protects private investment.

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