Oil & gas news

EXPLORATION DRILLING ON LANKARAN-DANIZ DEPENDS ON TOTALFINAELF-SOCAR TALKS

TotalFinaElf is in talks with SOCAR over the drilling of the third exploration well on Lankaran-Daniz / Talysh-Daniz.

The general manager of TotalFinaElf in Azerbaijan Pierre Doll has said that since the wells drilled on Talysh-Daniz came out dry, drilling on Lankaran-Daniz depends on the outcomes of negotiations with SOCAR.

The essence of the talks is that if the third well also proves fruitless, SOCAR will have to assume a portion of the company's expenses.

The contract is owned in the following percentages: SOCAR 25%, TotalFinaElf (operator) 55%, OIEC 10%, and Wintershell 10%.

ABSHERON MAY PROVE ONE OF THE RICHEST FIELDS

SOCAR president Natig Aliyev, addressing the "Caspian oil and gas: refining and petrochemicals" conference Wednesday, said the Absheron prospect could become one of the major hydrocarbon fields not only in Azerbaijan, but also in the entire Caspian region. Preliminary geological and exploratory operations suggest that the prospect is equal for reserves to Shah-Daniz, he said.

The Chevron Azerbaijan John Connor told the conference that drilling of the first exploratory well would be completed shortly. The well is being drilled in the deepest portion of the Azeri sector of the Caspian. Chevron, project operator, holds a 30% interest stake in the contract, SOCAR holds 50% and TotalFinaElf 20%.

SOCAR TO ATTEND MOSCOW OIL AND GAS EXHIBITION AND CONFERENCE

The biggest in CIS oil and gas exhibition, MIOGE-2001, is due in Moscow June 19-22. The show is being organized by British ITE group.

500 companies from 30 countries will take part in the international exhibition, including such giants as Shell, BP, Chevron, Conoco, ENI, Fortum, INA, Lukoil, YUCOS, SlavNeft, TatNeft, Botas, SOCAR, BelorusNeft, etc.

A SOCAR delegation will be led by the company's senior expert Eldar Shahbazov. It will also include around 20 businessmen.

SOCAR TO RETAIN 30% IN GROUP OF SPONSORS

SOCAR is going to retain a 30% interest stake in the BTC Group of Sponsors and sell the other 20% to another shareholder of the group or a company that may join it in the future. Deputy head of SOCAR's foreign investment section Vitaliy Beglarbayov has told journalists that the process would complete in 2001.

He indicated that Chevron and TotalFinaElf are interested in joining the Group, with former seeking a 10% interest and talks underway with the latter.

ITOCHU TO CONTINUE INVOLVEMENT IN CASPIAN REGION PROJECTS

Expected production of high quality light crude from Azeri-Chirag-Gunashli fields will amount to 1 million barrels per day by the year 2010, general executive director of Itochu Oil Exploration Co. Ltd. Mr. Shiro Morita told the Caspian Oil and Gas Show in Baku Friday.

According to Mr. Morita, today ACG output stands at 110,000 barrels per day.

"Itochu" is committed to continuing involvement in Caspian oil projects, he said. Since 1996, when "Itochu" opened an office in Baku, a number of Japanese companies followed suit, most of which are involved in offshore projects Kurdshi (Azerbaijan) and Kashagan (Kazakhstan).

Japanese government has credited the construction of a terminal within the "Severnaya" power station by providing a loan of $320 million. Besides, $20 million worth of assistance has been provided to Azerbaijan and other Caspian countries.

CENTURY CONTRACT TO FETCH $45BN TO OIL DEVELOPMENT FUND

"The Contract of the Century" alone will fetch $45 billion to the Oil Development Fund, its executive director Samir Sharifov told journalists Monday. According to him, the money will arrive over the period between 2000 and 2029.

Under the Contract, the profit rate will peak at over $5 billion a year in 2011, with a decline starting in 2017 from $3 billion annually.

Touching upon the Fund expenditure, S. Sharifov said the money should not be used to replenish budget deficits or repay the state debt, but should serve the oil sector development. Such practice has proved successful in Norway, he concluded.

THREE WELLS TO BE DRILLED ON KURDASHI

Three exploration wells are to be drilled on the Kurdashi prospect, exploration manager of the Agip Azerbaijan B. V., project operator, Mr. Stefano Rossi, told journalists Monday.

Explaining that the area is noted for depth variations, he said one drilling rig would not cope with the job and that Istiglal, Dada Gorgud and Gurtulush rigs would have to be used as well, he said.

Mr. Rossi added that the AD NIX well has been already drilled to a 4,225 meter mark using the Istiglal rig, while drilling of the second well is currently underway. The first well has played a special role in studying the field though showing that the reserved are not abundant.

According to Mr. Rossi, KD NIX well, bored on May 7, is being drilled using the Dada Gorgud rig in 42 meters of water. The third well will be drilled using the Gurtulush rig.

BP HELPING LOCAL SUPPLIERS

BP intends to procure more Azeri goods and services in order to encourage local suppliers and producers. Currently, the company is spending extra 30% to import goods and services, according to the head of the BP supply group Steven Loss. In order to procure goods from local suppliers, BP is prepared to help modernize the local supply base. The company has established database of the companies offering competitive service meeting international standards.

According to Mr. Loss, BP will not encourage the suppliers pursuing short-term commercial interests and is committed to developing durable partnership with local companies.

GAS SYSTEM RECONSTRUCTION PROJECT TO COMPLETE IN LATE 2001

According to the chairman of the "AzeriGas" open joint stock company Alikhan Malikov, the "Reconstruction of Azerbaijan's gas system" project will be completed at the end of 2001. The project was signed for by the Azerbaijan government and the International Development Association and is valued at $24.6 million, of which $20.2 million has been allotted by the World Bank and $4.4 by the Azerbaijan government.

The work on the project envisions improvement of the quality of gas, anti-corrosion protection promotion, installation of new gas meters at industrial enterprises, and sophistication of gas metering systems.

AZERNEFTYAG ANNOUNCES TENDER

The "AzerNeftYagh" production unit has announced a tender for the supply of spare parts for the ELOU-AUT-6 facility and the repair of furnace. The tender is to be held on two lots: supplies of equipment and spare parts for the facility and repair of the furnaces on a turn key basis.

Interested bidders may collect requirement sheets by paying a non-refundable fee of $600 for lot 1 and $400 for lot 2.

The deadline for submitting bids for lot 1 is 5 a.m. July 26 and for lot 2 is July 30. The tender bids will be unsealed on July 27 for lot 1 and July 30 for lot 2.

Bidders are required to provide a bid security in the amount of 2% of the biding amount.

NEW OFFSHORE PLATFORMS REQUIRED

Starting from 2003, Azerbaijan will need at least 4 larger offshore platforms than it currently has, the ExxonMobil senior manager J. McDonald told the Caspian Oil and Gas 2001 exhibition conference last week.

Only one enterprise in the Caspian, the "ShelfProjectStroi" production unit, if upgraded, will be capable of modernizing 4-5 offshore platforms at a time, Mr. McDonald said.

SOCAR TRANSFERS AZM150BN IN TAX TO STATE BUDGET IN MAY

A source from SOCAR has told AssA-Irada that the company transferred AZM150 billion in tax to the state budget in May. According to the forecast, a total of AZM1.45 trillion in tax is to be transferred in 2001, as opposed to AZM1.3 trillion last year.

Although the budget assignment for the first 4 months has been under-fulfilled, by 61%, SOCAR intends to make up for the backwardness by the year's end. In May alone, the over-fulfillment of the plan made up AZM30 billion, which was made possible due to a surge in crude prices in world markets.

Azernews

AssA-Irada