BP may drill in the Caspian Sea later this year

BP, the field operator, drilled a first exploratory well in 2000-2001, but stopped 1,000 metres short of the required depth of 5,025 metres because of technical problems. It wants to drill the second well to confirm the field's reserves.

"It's possible we'll start drilling the second exploratory well at Inam in the third quarter of 2007 with the Istiglal rig, which is capable of drilling wells of more than 7,000 metres in a sea depth of up to 700 metres," Schrader said.

The exact timing will depend on when the rig completes a fourth evaluation well at the nearby Shakh Deniz field, which is jointly operated by BP.

Inam, which is estimated to hold about 2 billion barrels of probable oil reserves, is half-owned by Azerbaijan's national oil company Socar. BP and Shell have an equal split of the remainder.

Last year, South Korea, the world's fourth biggest crude oil buyer, reached a preliminary deal with Azerbaijan to join the oil block, stepping up its push into Central Asia.

Socar, BP and Shell signed a $4 billion production sharing deal on Inam in 1998, estimating then that the deposit contained 100 million tonnes (over 730 million barrels) of oil. Reuters