SOCAR plans to sign another production sharing agreement

SOCAR plans to sign a contract with the Canadian Zenith Energy company to develop a bloc of onshore fields Murakhanly-Jafarli-Zardab, SOCAR President Rovnag Abdullayev told journalists.

“The contract is ready, we have received the permission for signing from Azerbaijani President. The experts have been working on the technical details of the contract. Muradkhanly is a complex field and we have serious problems there, this is our third negotiations on the field development,” Abdullayev said.

However, Abdullayev found it difficult to say when the new contract will be signed and what SOCAR’s share is going to be.

British Ramco company was previously in charge of development of the bloc. PSA was signed on July 21, 1998. The resources of the field were estimated by SOCAR’s specialists at 60 million tons of oil and the required investments  - $1.2 billion. According to the contract, Ramco had to drill two exploration wells on the field. However, the company failed to honor its commitments, the contract was terminated and the field’s ownership was returned to SOCAR.

In May 2012 SOCAR and Vietnamese Vietnam Oil & Gas Group (Petrovietnam) signed the agreement on the main commercial principles and provisions of the contract on rehabilitation, exploration, extraction and production sharing of Muradkhanly-Jafarli-Zardab bloc. However, the contract for the field development has not been signed.

* Zenith Energy is involved in exploration, development and extraction of oil and natural gas in Argentine and Italy. The company has also performed oil and gas exploration works in Central Asia and Africa.

At the end of September, 2015 Board of Directors of Zenith Energy Ltd authorized opening of the regional representation of the company in Baku. This is the fourth office of Zenith Energy, three others are located in Calgary, Canada, Genoa, Italy and Buenos Aires, Argentine.

** The bloc of fields Muradkhanly-Jafarli-Zardab 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 million cub.m. of gas. At present 77 wells have been operating on the bloc of fields.