Production sharing agreement for development of Muradkhanly bloc ratified by parliament

Yesterday Milli Mejlis (parliament) of Azerbaijan ratified the production sharing agreement (PSA) for rehabilitation, exploration, development and production sharing of onshore fields Muradkhanly, Jafarli and Zardab.

The contract was signed on March 16, 2016 between SOCAR (20%) and Canadian Zenith Aran Oil Company Limited (80% operator). The contract was signed for 25 years.

According to PSA, the contract area is conditionally divided into rehabilitation and exploration parts. Within 150 days since the effective day Zenith Aran Oil Company Limited must prepare and submit the plan of rehabilitation of the bloc and extraction for approval by SOCAR.

The hiring process for the oil and gas operations will start since the effective day.70% of engineers and technicians and 90% of workers should be Azeri citizens, after five years this ratio should be 90% and 95%, respectively.

Total area of the contract bloc is 642.4 sq.km. Currently the daily oil production on the bloc of fields totals 350 barrels. A small volume of gas is also extracted on the bloc, which is used for the industrial needs.

* The bloc of Muradkhanly-Jafarli-Zardob fields is located on the territory of Imishli region. Muradkhanly field was discovered in 1971, Jafarli in 1984 and Zardab in 1981.

The residual resources of the bloc are estimated at 1.8 million tons of oil and 36 mcm of gas. Currently 77 wells have been operating on the bloc of fields.—0—