Results of First Well on Caspian Absheron Better than Any Expectations

Baku /16.10.19 / Turan: Managing Director of Total E&P Azerbaijan Denis Lemarchal said on Wednesday that the preliminary results of drilling the first appraisal and production well ABD-001 at the Caspian Absheron field are "even better than predicted," which gives reason for Total, as the operator of this gas condensate project, to count on good results in the full-scale development of this field.

"We will focus on two main reservoirs - Fasila B and Fasila D. In the coming weeks we will test the well for gas inflow... But now we believe that it will be even better than what was predicted. This means our - Total and SOCAR - readiness for receiving good news from the second, full-scale phase of the development of Absheron, the implementation of which will begin in a few years," Lemarchal told reporters.

Gas from the first phase of Absheron in the amount of 1.5 billion cubic meters (bcm) per year (at its peak) will begin to be extracted from 2021, for which appropriate conditions will be created.

Already at the end of 2019 and the beginning of 2020, work will begin on the creation of infrastructure for the upcoming transportation of gas from the Absheron Phase-1 to the shore.

In particular, a gas pipeline will be stretched from ABD-001 to Oil Rocks, and then the existing SOCAR infrastructure for delivering gas to the shore will be involved.

Note that the ABD-001 well became the deepest in the Caspian, reaching 7411 meters. It was drilled from the Heydar Aliyev floating semisubmersible drilling rig, which will leave Absheron in the coming weeks and go to BP for drilling in another part of the Azerbaijani sector of the Caspian.

The costs for the first phase of Abshepron development are estimated at $ 1.1- $ 1.3 billion, of which about 70% are for the ABD-001 well.

As SOCAR Vice President Yashar Lyatifov noted, Total"s modern technological solutions have reduced the cost of the Absheron project, despite the fact that it concerns large sea depths and large well depths.

Recall that SOCAR and Total on an equal footing on November 21, 2016 signed an agreement on determining the main contractual and commercial conditions for the first stage of the development of the Absheron gas condensate field. The basic agreement is the exploration, development and shared distribution of production, signed in February 2009 for 30 years.

The contract area is 747 square km. The block is located 100 km from Baku at a depth of 450-500 meters. The field"s reserves are estimated at 350 bcm of gas and 45 million tons of condensate.

The expected daily debit of the first well at the Caspian Absheron may exceed 2 thousand tons of condensate and 4.3 million cubic meters of gas.

All gas from the Absheron Phase-1 will be purchased by SOCAR for the country's needs, condensate will go to the Baku-Tbilisi-Ceyhan oil pipeline.

With full-scale development, Absheron can produce about 5 bcm of gas per year or more. Gas from the second phase of the Absheron can, approximately from 2025-26, enter the Southern Gas Corridor if clear agreements are reached on this.

Good expectations from the Absheron project are evidenced by the fact that new participants, in particular, the Russian company LUKOIL, are eager to enter it.

Such an opportunity has been under discussion for a year and, according to Le Marchal, the decision depends on the project management.

"Technically and technologically, the project does not need new participants. But if you take the commercial side, we are open for negotiations," said the representative of Total.

Gas reserves from the Caspian Absheron will replenish the total confirmed reserves of Azerbaijan, now estimated at 2.6 trillion cubic meters.

The total volume of gas produced so far in Azerbaijan exceeds 800 bcm, which is seven times less than the total projected reserves of the country and indicates a significant potential for the development of gas production and gas export. -0-