Azerbaijani parliament ratifies PSA contract

The Azerbaijani parliament ratified (101 votes to 2) a contract for the exploration, rehabilitation and development of the Bahar and Gum Deniz offshore fields in the Azerbaijan sector of the Caspian Sea on April 29.

The State Oil Company of the Azerbaijan Republic (SOCAR) signed a PSA contract with Bahar Energy Limited for the exploration, rehabilitation and development of the Bahar and Gum Deniz offshore fields in the Azerbaijan sector of the Caspian Sea in December 2009. Bahar Energy Limited was registered in the Jebel Ali Free Trade Zone in the UAE.

The contract consists of two parts. The first involves the rehabilitation and stabilization of production on the field and the second - the exploration of the Bahar-2 promising structure.

Initially it is planned to drill 50 new wells. Later on, the companies are expected to repair and restore 100 wells. SOCAR believes the attraction of foreign capital will allow stabilizing the oil and gas production from these fields and increasing the residual reserves in the short term.

Under the second part of the contract, which involves the exploration of the Bahar-2 structure, it is planned to drill one exploration well in three years and in case of necessity to drill another one in the fourth year.

Gum Deniz has operated since 1955 and is located 21 kilometers southeast of Baku. So far, the field has produced about 28.9 million tons of oil and 27 billion cubic meters of gas.

Bahar has operated since 1969 and is located 40 kilometers southeast of Baku. So far, the field has produced over 16.8 million tons of oil and approximately 128.7 billion cubic meters of gas.

The contract is concluded for a period of 25 years with option to renew for the next five years. Initially, SOCAR's share of profitable hydrocarbon will be 40%, in the future it will be increased to 90%. The investment, which will be invested in the contract, according to initial estimates, will amount to $1 billion.

About 70% of the production from this unit of fields will be implemented with newly built platforms.


/Trend/