Oil & gas news

DAY OF OIL-WORKERS ESTABLISHED

President Aliyev decreed Friday to establish the Day of Oil-workers to be marked on September 20. The preamble of the decree elaborates on the history of oil production in Azerbaijan dating back to the first oil gusher in Bibiheybat settlement outside Baku in 1948.

The first international oil deal mirroring independent Azerbaijan's economic sovereignty was inked on September 20, 1994.

OIL ROCKS CRUDE TO BE PURIFIED

Construction of a 12,000-ton storage depot has completed at Oil Rocks. After it is put into service, the crude produce here will be purified off reservoir water, sand and other mixtures and then transported to the shore. The new facility will also help reduce losses and prevent environment pollution.

Construction of the second part of the depot, with the same capacity, is also on agenda, according to "Neft Dashlari" oil and gas producing unit.

NATURAL GAS SUPPLIED TO 18 PROVINCES

Besides big cities, natural gas is currently supplied to 18 provinces, according to the general director of "AzerNagl" state company Nazim Samadzadeh.

He said the number of provinces receiving gas could rise by winter.

Mr. Samadzadeh added that ways of improving gas supply in the country were discussed last week in the President's office. For this, more gas will be purchased from Russia, which, in turn, will require some revamp work on the gas pipeline connecting Azerbaijan with Russia. Besides, a new 17km line (1,200mm in diameter) will be built.

He said a tender was currently in preparation to carry out the work.

GEORGIAN DELEGATION DISCUSSES GAS PIPELINE DETAILS WITH SOCAR

A Georgian delegation led by Foreign Minister Irakliy Menagarishvili paid an informal visit to Baku on August 15 and held talks with SOCAR experts at the President's Office. According to a source from the state oil company, the parties spoke of the Baku-Tbilisi-Erzurum gas pipeline, a transit agreement with Georgia and the latter's acquisition of Azerbaijan's Shah-Daniz gas.

A source from the Georgian embassy has said the delegation was also engaged in preparations for Georgian President Shevardnadze's visit to Baku.

CONSTRUCTION OF NEW DRILLING RIG STARTS

Dutch "Maersk Contractors" has started construction of a floating drilling rig funded by ExxonMobil, Chevron and Conoco. A source from SOCAR told AssA-Irada Monday that parts and topside modules for the rig are being imported from Singapore, while assembly of the rig is underway at the "CaspianOilFleet" yard.

The rig, contracted for completion at the end of 2003, will be capable of drilling in 1,000 meters of water and will cost $250 million.*

JULY ONSHORE OIL AND GAS OUTPUT PLAN FULFILLED

7 onshore oil and gas production units produced 71,062 tons of oil in July, which is 22 tons above projections, SOCAR said Wednesday.

"SurakhaniNeft" unit produced 10 tons extra, "BinagadiNeft" 8 tons, "SiyazanNeft" 2 tons, "BibiHeybat" and "Tagiyev" 1 ton each.

However, as compared to 2000, a total of 119 tons less has been produced. The backwardness was largely due to "BalakhaniNeft" and "Tagiyev".

ISTIGLAL RIG LEAVES INAM

The "Istiglal" semi submersible drilling rig has left Inam prospect following a temporary suspension of drilling operations on the first exploratory well. A source from BP told Azernews Friday that specialists are currently assessing the likelihood of further drilling operations on the prospect given the high reservoir pressure in the well.

This will take some time, while "Istiglal" is scheduled to start drilling the first exploratory well on "Nakhchivan" prospect in the third quarter.

The source said since only "Istiglal" is capable of drilling in high well pressure, if drilling on Inam is continued "Istiglal" will be involved again.

This is the second time work on Inam is suspended.

SOCAR holds a 50% stake in the Inam PSA, BP and Shell hold 25% each.

"KINEMETRICS" TO SUPPLY SEISMIC EQUIPMENT

US "Kinemetrics", producer of seismic equipment, has won the tender for the supply of seismic stations to Azerbaijan, a source from the tender commission told Azernews Saturday.

Modern digital telemetric equipment will be installed at all stations throughout Azerbaijan. In some regions, the stations will operate for the first time.

A representative of the company is expected to arrive in Baku shortly to sign the contract. Installation of the stations will take 6-7 months.

Also vying in the tender were Japan's Nichimen Corporation, US Retraction Technology, Russian Emercom, and Canadian Nanometrics.

DEVON ENERGY TO ACQUIRE MITCHELL ENERGY FOR $3.5 BILLION

Devon Energy Corporation and Mitchell Energy & Development Corp. based in Houston, Texas announced August 14 that Devon will acquire Mitchell for cash and stock. With the acquisition, Devon will become the second largest independent natural gas producer in the United States.

Total proved reserves will increase by 45% - from 1.1 billion barrels of oil equivalent to over 1.5 billion barrels.