Oil & gas news

WB OFF SHAH DANIZ GAS TRANSPORT TALKS

The World Bank is not a party to the negotiations to set transit fees for transportation of natural gas from the Shah Daniz field of Azerbaijan to Turkey through Georgia, the WB Baku office said in a statement Friday.

Commenting on the Bank's position, WB vice-president for Europe and Central Asia Joganssen Linn said: "At the Georgian government's request the Bank is funding the technical consultations during the talks and possesses the right to police the rational use of its funds. It is regrettable that this is taken as a WB bid to handicap a transit agreement".

Regional and international media have recently reported the WB insistence on a $5-10 fee for 1,000 cubic meters of gas in support for Georgia's position. However, the statement denies any WB involvement in the issue, saying this is a demand by the Georgian party solely.

Azerbaijan, in its turn, offers $2-5 for 1,000 cubic meters of gas to be transited.

OIL PRODUCTION ON MURADKHANLI RESUMES

15 wells have been put back into operation and are now yielding 40 tons of oil a day on the Muradkhanli field, which British Ramco returned inoperative to SOCAR. A source from the state oil company told AssA-Irada Saturday that five more wells will be commissioned soon, with daily oil production planned to reach 80 tons.

60 wells are still defunct after they were closed by Ramco in a bid to retain the ecological balance at the site.

According to SOCAR estimates, over $1 million is needed to revive the operational wells and to patch up the piping on the field.

DRILLING OF SECOND EXPLORATORY WELL ON GARABAGLI OVER

The drilling of a second exploratory well on the Garadagli field has neared an end after the footage of 5,700 meters was reached with the designed depth of 5,260 meters, a source from Salyan Oil, the operator of the onshore Kursanghi-Garabagli contract, told AssA-Irada Saturday. Well trials are scheduled to take place next week.

Salyan Oil expects the well to show better productivity than the first one, which is now in operation, yielding 150 tons of oil a day.

Drilling both wells is Croatian Cross Co., which is also expected to bore a third well in November this year.

SOCAR possesses a 50% stake in the Kursanghi-Garabagli PSA, while Delta Hess has 20% and EBRD 30%.

OIL, GAS BILL BEING DISCUSSED

A draft law "On oil and gas" has been forwarded to the Ministry of Fuel and Energy for consideration after being processed at the permanent parliamentary commission on energy, ecology and natural resources. As the bill had been devised before the Ministry was set up, it needs some amendments.

The draft is likely to be adopted in early 2002, a SOCAR source told Azernews Wednesday. In case the draft law is passed, the parliament will not have to ratify PSAs.

OIL CONFERENCE DUE IN VIENNA

An international conference on the oil of CIS countries, Russia in particular, is due in Vienna on December 11-13. The parties are expected to focus on crude prices in world markets, the impact of developments in CIS member-states, oil competition, etc.

The conference will be attended by representatives of major CIS and western oil companies, OPEC, as well as specialists from the International Petrochemical Association.

SOCAR said Monday it has also been invited and already confirmed the intention to participate.

AIOC HIKES OIL PRODUCTION

AIOC produced 3.9 million tons of crude, or 523,000 tons over last year, from the Chirag field in 8 months of 2001, a source from the company told Azernews Friday. Azerbaijan obtained in excess of 580 million cubic meters of gas free over this period.

In all, over 15.6 million tons of oil, including 1.5 million in Azerbaijan's profit oil, have been extracted under the Contract of the Century.

OILMEN ACCUSE FOREIGN COMPANIES

Chairperson of the Committee for human rights of oilmen Mirvari Gahramanli said that the rights of national employees are being transgressed in foreign oil companies. She was talking to a roundtable conference, "Transnational corporations and Azerbaijan", at the UN NGO Resource Center last Wednesday. For instance, local engineers are paid 10 times less than expatriate personnel, she said. The reason for the discrimination is that there are no trade unions, medical insurance and privileges for national staff, she thinks. Mrs. Gahramanli accused such foreign companies of breaking the labor legislation.

According to her, foreign oil companies are causing more damage to the environment than the Gabala Radar Station.

FIRST WELL ON AZERI TO BE DRILLED IN EARLY 2002

Drilling of the first exploratory well on central Azeri field will not start in October this year as was originally scheduled. The delay is due to the schedule of the "Dada Gorgud" semi submersible drilling rig, general director of the Caspian Drilling Company joint venture Shaig Bakirov told Azernews Monday.

According to him, "Dada Gorgud" will undergo its fourth upgrade later this year, therefore the drilling is likely to commence in February 2002.

Following the update "Dada Gorgud" will be capable of working in 475 meters of water, with estimated well depth of 6,500 meters. The first three updates cost some $80 million.

EXPLORATORY WELL ON NAKHCHIVAN REACHES 1,300 METERS

The drilling of the first exploratory well on the Nakhchivan prospect is progressing on schedule, as it had reached 1,300 meters as of September 15, a SOCAR source told AssA-Irada Thursday. The drilling of the well with an estimated depth of 6,444 meters is planned to complete in mid-December. The boring is being held using the "Istiglal" floating rig in 142 meters of water.

It was decided to spud the drilling of two exploratory wells on the prospect, whose reserves are evaluated at 80 million tons of crude, following preliminary prospecting operations.

SOCAR and ExxonMobil have a 50% stake each in the PSA on the prospect.

SOCAR BUDGET PAYMENTS TO SOAR IN 2002

SOCAR is expected to transfer AZM530 more than this year to the state budget in 2002, minister for economic development Farhad Aliyev told journalists Friday.

According to him, world crude prices will presumably make up $26 per barrel, while the oil projection in the 2002 budget is set at $22 per barrel.

CRUDE PRICES TUMBLING DOWN

Crude prices in international markets have continued to decline in the past 3 days, with a barrel of Brent mixture selling at $22, this year's lowest benchmark, at the London Stock Exchange.

On September 12 (shortly after the US terror attacks) a barrel was selling at $33 and any sharp downswings were not anticipated. OPEC is expected to meet urgently to attend to the problem.

It is remembered that while compiling the state budget for 2002 the Azerbaijan government considered the price of $22 per barrel.