Business

DANES TO BUILD BIGGEST DRILLING RIG IN CASPIAN

Danish "Maersk Contractors" is expected to embark on the drilling of the biggest and most powerful semi-submersible drilling rig in the Caspian in August. According to the company's commercial director John Madse, parts of the rig will start arriving from Singapore in July. The rig will be built at the shipyards of the Caspian Offshore Oil Fleet company.

The rig will be capable of drilling in 1,000 meters of water.

The Caspian Shipyard Company, contractor organization, is expected to commission the $250 million rig in the 4th quarter of 2003.

According to Mr. Madse, the rig is already scheduled to drill 5 wells: 2 on Zafar-Mashal, 2 on Nakhchivan and 1 on Absheron.

Construction of the rig will be financed by ExxonMobil, Chevron and Conoco, while the design has been prepared by Keppel Fels and Dutch Marine Structure.

FINANCIAL RISKS ON BTC CONSTRUCTION TO BE ASSUMED BY CONTRACTOR

By Anar Jabrayilli Azernews Staff Wrter

The SOCAR president Natig Aliyev believes that the value of the Baku-Tbilisi-Ceyhan oil pipeline project will not exceed $2.4 billion, of which $1.4 billion worth of work will be carried out in Turkey and $1 billion worth of in Azerbaijan and Georgia.

In regard to speculations that the anticipated cost of the MEP project has risen by $400-500 million, N. Aliyev said any additional expenses would have to be incurred by the companies engaged in the pipeline construction.

"We have agreed with BOTAS that should expenses on the territory of Turkey exceed $1.4 billion, they would be covered by the Turkish government", the SOCAR president said.

Touching upon the pipeline construction on the territories of Azerbaijan and Georgia, N. Aliyev said if the budget exceeds the earmarked $1 billion, then the expenses would have to be assumed not by the group of sponsors, but by the contractor company. He said the tender would be announced after the detailed engineering is over.

SOCAR - biggest taxpayer

The SOCAR president Natiq Aliyev told a traditional news conference at the Yeni Azerbaijan Party Friday that the company has been keeping its oil output at 9 million tons since 1998, which should be considered as success of the Azerbaijan oil industry, he said.

N. Aliyev said SOCAR is the biggest taxpayer in Azerbaijan and makes up a fourth of the state budget.

According to him, monthly wages of oil-workers average at AZM580,000, while those working offshore make as much as AZM1.5-2 million per month.

The SOCAR president believes that an oil boom is in store for Azerbaijan, which is going to tell on overall economic development of the country.

"Only on the 4 BP-operated contracts and the Azerbaijan-Turkey gas pipeline project, a total of $9 billion will be invested in Azerbaijan, something unprecedented elsewhere in the world", he said.

Touching upon the disputed Caspian fields, the SOCAR president said Turkmenistan's allegations are totally groundless and Azerbaijan intends to push ahead with the work on the contracts. "In spite of this, I think the legal status of the sea should be determined so that foreign companies should not face any problems in the future ", he said. Regarding the Oil Development Fund, Mr. Aliyev said it would become a financial source of developing non-oil sectors of the Azeri economy.

8 gas wells to be drilled in shallow Gunashli

8 gas wells will be drilled in the shallow portion of the Gunashli field. According to the SOCAR president Natig Aliyev, after the work is done the company will be able to produce extra 2 million cubic meters of gas a day.

At present, the first well is being drilled, as the footage of over 1,000 meters has been reached.

No energy problems in offing

Natig Aliyev said "AzerEnergy" JSC has accumulated 170,000 tons of heating fuel and 120 million cubic meters of gas. He added that if the storing pace is kept till winter, the republic can save 450,000 tons of heating fuel and 0.5 billion cubic meters of gas.

According to N. Aliyev, the reserves have been piled up thanks to the natural gas imported from Russia, for which SOCAR pays $15 million a month.

The president of SOCAR went on to say that there would not be any energy problems next winter.

$272MLN REQUIRED FOR SUBTERRANEAN GAS STORAGE RECONSTRUCTION

The head of the Subterranean Gas Storage Laboratory (USGL) Vagif Aslanov told AssA-Irada during the Caspian Oil and Gas Exhibition-2001 that a total of $272 million is necessary for reconstruction of the Kalmas and Garadagh gas storage. $81 million is required for the Kalmas storage alone to be refurbished and expanded to 1.5 billion cubic meters. Unlike the Kalmas, the Garadagh storage will be refurbished in two stages. The first stage will include the upgrade of its obsolete equipment, construction of a new compressor station and expansion of the storage capacity to 1.5 billion cubic meters. The work will require $80 million.

After the first stage is completed, the gas storage will be earning around $21.4-33.5 million a year. Production of 5,000 tons of retrograde gas condensate is anticipated.

The second stage will include reconstruction operations intended to bring the storage capacity to 3 billion cubic meters. 15 wells will be drilled and a third compressor station built to bring reservoir pressure to 230 bars. The second stage will require $111 million.