Business

AIOC TO SPEND OVER $500 MLN IN 2001

By Anar Jabrayilli Azernews Staff Writer

In the first quarter of 2001, the AIOC spent $30 million in capex and $17 million in opex, according to the AIOC president David Woodward.

He said capex for 2001 would constitute $450 million and opex $97.2 million.

In the remaining part of the year, the AIOC expenses will rise as compared to January-March.

"We plan to drill new wells on Chirag this year and complete the upgrade of the drilling rig", Mr. Woodward said.

The AIOC president indicated that high labor safety performance had been reached with no time losses resulting from breakdowns.

4-5 BILLION BARRELS ENOUGH TO MAKE BTC VIABLE

7-month basic engineering of the Baku-Tbilisi-Ceyhan MEP will be finalized in mid-May with a report for project partners currently in preparation, the AIOC president said.

According to him, afterwards, the number, proportions and location of pumping stations, as well as a 500m wide pipeline route, will be determined. Besides, the engineering will enable partners to arrive at a project cost estimate.

Mr. Woodward said he was already familiar with initial results and, taking into consideration the fact that pipeline runs through mountains, its length will be a little longer than the designed one.

The funding issue remains unresolved, as some members of the Group of Sponsors cannot finance their interest stakes, the AIOC president said.

According to him, 4-5 billion barrels of oil a year will be enough to consider the BTC economically viable. Earlier, the figure of 6 billion barrels was frequently a talking point.

"I think the AIOC and SOCAR oil, as well as oil produced under other contracts, will make up the necessary 4-5 billion barrels", he said.

Mr. Woodward said talks with Chevron, TotalFinaElf and Alberta Energy, interested in joining the group of BTC sponsors, are currently underway. He added that SOCAR intends to sell a 20% share of its 50% interest stake in the MEP.

The 500m wide pipeline corridor has to be approved by Turkish, Azeri and Georgian governments, the president said.

Daily output from Chirag-1 hiked

In the first quarter of 2001, 117,000 bpd were produced from "Chirag-1" platform with the plan of 115,000, according to David Woodward. The surplus 2,000 bpd will result in production of 5.8 million tons of oil in 2001 as opposed to the planned 5.7 million, he added.

13.2 million barrels of oil were produced in January-March.

According to Mr. Woodward, 14 million tons of oil were produced from the platform since the beginning of oil production in 1997, of which 10 million tons were exported through the Baku-Supsa oil pipeline and 4 million via the Baku-Novorossiysk pipeline. 84 tankers were lifted from Supsa and 41 from Novorossiysk to world markets.

Phase-1 oil production scheduled for late 2004

Oil production within Phase-1 of the Full-Field Development project of Azeri-Chirag-deepwater Gunashli fields is expected to start in late 2004.

Upon completion of Phase-1, daily and yearly output on the Contract of the Century will reach 350,000 barrels and 17 million tons respectively, according to the AIOC president.

He said bids for construction of a sub-sea pipeline, a new platform on Azeri field and expansion of the Sangachal terminal had already arrived. Detailed engineering operations on this phase are scheduled to complete at the end of this year, while the fourth quarter will see engineering operations for Phase-II of the Full-Field Development project of Azeri-Chirag-deepwater Gunashli, the AIOC president said.

Well on Inam to be sealed off temporarily

Work on sealing off the first exploratory well on offshore Inam field is expected to last till the end of April, according to the project-operator BP.

This has been made possible thanks to sidetrack drilling, which resulted in reduced well pressure. After the well-mouth is closed, the "Dada Gorgud" semi-submersible drilling rig will abandon the field and the drilling will resume only by "Istiglal", currently engaged in Absheron prospect.

As reported earlier, drilling operations on the first exploratory well on Inam were suspended due to high pressure at the depth of 4,442 meters. Designed depth of the well is 5,025 meters. Partners in the Inam PSA are SOCAR (50%), BP (25%) and Shell (25).

TENDER TO BE JOINED BY 8 CONSORTIA

8 consortia and one company can submit their bids for construction of the Garadagh-Digah-Severnaya Power Station pipeline, which will supply the station with natural gas.

According to the general director for the project executive group Elkhan Mammadov, only 12 of a total of 45 interested companies eventually submitted bids. After considering them, the Japanese Bank for International Cooperation (JBIC) selected 8 of the 12.

Mr. Mammadov said the 8 companies, Itochu/Alarko/Mitsui Shipbuilding Consortium, Kawasaki/OOGPO SOCAR Consortium, Marubeni/JGC Consortium, Mitsubishi Corporation, Mitsui/Toyo Consortium, MHI/Tomen Consortium, Niigata/NIC Consortium, Nippon Steel/Sumitomo Consortium, have been invited to forward, within 75 days, concrete bids to the tender commission, which, in its turn, will review them within 90 days and submit to the JBIC for approval. The process of approval is expected to take a month.

A conference for bidders has been scheduled for July 6-7, while the tender itself is to be finalized on July 9.

JBIC has allocated a JPY118 billion credit for the reconstruction, with 0.75% yearly interest rate. The tender participation fee is $1,000.

According to Mr. Mammadov, construction of the Garadagh-Digah-Severnaya Power Station pipeline is to take 630 days (21 months) after an agreement with contractor company is signed.

The pipeline will be 90km long. The 45km section from Garadagh till Digah will be 1,000mm in diameter, while from Digah till the power station - 700mm. To supply the station with gas, two compressors will be built - an operating and a reserve one. Depending on the season, entry pressure will range between 12 and 15 bar, while exit pressure will be 37 bar.

The pipeline will have yearly throughput capacity of 10-12 billion cubic meters of gas.

AzeriGas plans on 3 projects with WB

The Closed Joint Stock Company "AzeriGas" continues working on three WB-funded projects: personnel training, audit for 2000-2001 and network modeling.

According to an "AzeriGas" spokesman Elkhan Mammadov, the first project envisions teaching of English to 30 "AzeriGas" employees. Implementation of the second project has not started yet, with the audit of the year 1999 currently underway. A tender has been held for network modeling and results sent to the WB. Only one company, US Infotex, took part in bidding.

Besides, the 5-World Station System will be installed to program gas transportation.

CASPIAN STATUS EXPERTS TO VISIT ASHGABAT

Caspian legal status has been a talking point for several years with another meeting of heads of littoral states scheduled for October, President Aliyev told journalists at the Bina Airport of Baku Friday upon arrival from the Turkic summit in Istanbul.

"In a meeting with me, Turkmen President Niyazov again raised the issue of a median line. Turkmenistan has a different position on the issue, while ours is based on international legal norms and we have repeatedly declared it", H. Aliyev said.

According to him, the two presidents decided that Azeri experts would visit Ashgabat on May 1 to hold another series of talks to that effect.

AZERKIMYA ANNOUNCES TENDER FOR SUPPLY OF TECHNICAL SALT

The "AzerKimya" state concern is inviting bids for the supply of 60,000 tons of technical salt to be used in production of caustic soda and chlorine at the Plant of Surface Active Substances.

The supplies will be paid for in Manats. Bidders can take part in the tender by paying a non-refundable fee of AZM1 million. The tender commission will choose the lowest evaluated responsive bid noted for best quality of work, most competitive financial and technical capabilities and most extensive experience.

Tender bids must be inclusive of all types of taxes and duties. Bidders are also required to provide a bid security in the amount of 2% of the cost of the proposal.

Tender bids will be unsealed at 3 p.m. on May 30 at the conference hall of the Plant of Surface Active Substances.

AZERSUN HOLDING TO PROCESS SCRAP PAPER

"Azersun Holding" Joint Venture, which has taken over "Baki Tara" enterprise, is expected to start receiving scrap paper from legal and physical entities shortly. According to the JV, by processing paper the JV intends to address its acute shortage in the republic.

The JV is in talks with foreign companies to buy paper and cardboard processing equipment. Modernization of the enterprise, scheduled to commence in June, is going to cost $3 million.

DUTCH EXPERTS HELP AZERI ENTREPRENEURS

As part of a Dutch government program, over 20 Dutch experts have provided consultative services to Azeri entrepreneurs in Baku and Azeri provinces, taking part in preparation of business plans for private companies, a source from the Azerbaijan Confederation of Entrepreneurship (ACE) told AssA-Irada Saturday.

The program also calls for the establishment of Azeri-Dutch joint ventures and procurement of Dutch equipment at a low cost.