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ExxonMobil will sign agreement with SOCAR on compensation payment for refusal of exploration well drilling in Azerbaijan

21 June 2005 [09:35] - TODAY.AZ
SOCAR expects shortly signing of the agreement with ExxonMobil on payment of the compensation from the American company for refusal to drill the second exploration well on the Nakhchivan prospective structure, the SOCAR head, Natik Aliyev told journalists on 20 June 2005.
According to him, the size of compensation will be around $30 million. According to some data, the amount of funds to be transferred to the Azerbaijan’s State Oil Fund (SOFAR) will be $27 million.  

The agreement will be signed shortly, and, according to Aliyev, “some legal issues” are currently under coordination”.

The PSA contract for exploration and development of this promising structure was signed on 1 August 1997. The sides’ shareholding in the contract has been distributed like this: SOCAR - 50% and ExxonMobil - 50% (operator).

The design depth of the second well on the Nakhchivan prospective structure under the contract signed is to be 5350 meters, which is 50 meters lower of the top of the upper Kirmaki sand suite.

The Azerbaijani experts of the oil industry expressed their opinion to Trend that ExxonMobil could discover hydrocarbons on the Nakhchivan in case of the second well’s laying point would have been positioned on the arch of the structure, where the probability of the upper Kirmaki sand suite stripping exists.

Drilling of the first well on the Nakhchivan from the Istiglal semi-sub rig was suspended in February 2002 and started on 22 August 2001. The well’s initial design depth was 6444 meters, the final - 6746 meters. By the results of drilling ExxonMobil has not revealed any attractive hydrocarbon deposits.

URL: http://www.today.az/news/business/19689.html

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