Azerbaijan Close to Adopting New Umid-Babek Licence
Azerbaijan’s parliament has been advised to approve a new licence for the Umid-Babek offshore gas-condensate fields.
The parliamentary committee on natural resources, energy and ecology advised parliament to approve the new Risk Service Contract for exploration and development of the blocks, after discussing the existing and new contracts for the fields on April 21.
The new contract was signed January 12 by state-owned Socar and joint venture Socar Umid (the latter being 80%-owned by Socar and 20% by privately owned UK-registered Nobel Upstream) but was not publicly announced at the time. But it needs approval from both parliament's energy committee and the full parliament, neither of which has yet happened.
The parliamentary committee’s head Valeh Alexeyrov said that maintaining full control over domestic gas supplies and reducing dependence on external factors, as well as ensuring domestic demand for gas at the lowest possible prices, is the Azerbaijan government’s main strategic goal.
Umid-Babek is in deep water in Azerbaijan's part of the Caspian Sea, 75 km from Baku. Both fields were discovered in the 1950s.
Azerbaijan's Parliament (Milli Majlis) (Photo credit: parliament / http://www.meclis.gov.az )
At Umid, nine wells drilled in 1977-92 but none reached gas. After further exploration in 2008-10, Umid gas reserves were estimated at 200bn m3 plus 40mn tons condensate but more appraisal is needed to confirm this. Production in 2014 from the high temperature/high pressure field collapsed to 0.63mn m3/d. But in 1Q2017 this was increased to 1.4mn m3/d. Cumulative gas production from Umid since 2012 is 1.314bn m3.
At Babek, Socar estimates reserves could be even higher -- at 400bn m3 of gas and 80mn mt of condensate -- following a 3D seismic survey in 2012.
Azerbaijan Desk