New contract on ACG bloc could be signed soon

SOCAR hopes to sign a new contract on development of offshore fields Azeri, Chirag and a deep-water section of Guneshli (ACG) in June 2016

This will be a production sharing agreement (PSA), just like the previous one. The contract will be signed with the current project partners, which include BP (35.78%), Chevron  (11.27%), ExxonMobil (8%), Indian ONGC (2.72%), Azeri SOCAR (11.65%), Japanese Inpex Corp. (10.96%) and ITOCHU Oil (4.3%), Norwegian Statoil (856%) and Turkish TPAO (6.75%).

Governmental sources told Turan that the newly signed contract will not be a prolongation of the effective contract, which expires in December 2024. The contract will be signed for the period of 25 years, which is till the end of 2041 (the contract has to be approved by parliament to enter into force).

In the new contract the government will have privileges it did not have in the previous one. “The working conditions in Azerbaijan for foreign companies have changes for the better. Their risks are much lower, than they were in the mid-1990s. Thus, the commercial components will be different,” the same source explained.

According to the preliminary conditions, it is planned to build a new production platform for 48 wells on Azeri field as  a part of the new contract. It is also planned to expand the operating platforms and drill about 150 wells from them as well as do some other works.

385.6 million tons of oil has been extracted on  the ACG till January 1, 2016. It is planned to extract over 900 million tons of oil from the ACG till the end of 2041. Later on the oil extraction could be increased by additional 100-150 million tons, if the latest technologies to increase the reservoir recovery are applied.—0—