Equinor Signs Azeri Contracts (Update)
Azerbaijan's state-run Socar and Norway's Equinor (formerly Statoil) have signed two offshore upstream gas contracts May 30, Socar vice president Vagif Aliyev told NGW.
The first deal is a service contract for the Karabagh gas field and the second is production-sharing agreement (PSA) on the Ashrafi- Dan Ulduzu-Aypara block.
According to preliminary exploration, Ashrafi is a gas field. The two other fields have yet to be explored. However geological studies show a high possibility of gas reserves there as well, the Socar executive said. Karabagh and Ashrafi each contain between 20bn and 30bn m3 of reserves.
NGW carried the news as the documents were signed. In a subsequent press release, Socar said that an appraisal well is scheduled to be drilled on the Karabagh field later this year, according to the terms of the deal with Equinor, with commissioning of the platform and first production planned for 2021.
Under the PSA for the Ashrafi -Dan Ulduzu –Aypara block, seismic acquisition will be carried out, followed by exploration drilling. Equinor and Socar will form a 50-50% joint venture to operate the block. This is the second PSA contract in which Socar will be joint operator with a 50% interest (see map below showing Equinor interests).
Equinor CEO Eldar Sætre said “the agreements signed today represent a natural next step in the region. This will strengthen our position in a prolific basin and develop growth options. The licenses lie in close proximity to the Azeri-Chirag-Guneshli block (ACG) in a basin we know well.” The Norwegian firm has a 7.27% stake in BP-operated AGC.
Equinor's head of exploration Tim Dodson (left) with Socar president Rovnag Abdullayev at the May 30 signing in Baku (Photo credit: Equinor)
About two-thirds of Azerbaijan’s gas currently comes from the BP-led ACG and Shah Deniz fields. BP also announced earlier that it is preparing to drill Shafag-Asiman in 2019, reckoned to rank as the second largest gas field in the Caspian Sea after Shah Deniz. BP and Socar each have a 50% interest, with BP the operator.
Socar previously set up a 50-50% joint venture with Total to develop the offshore Absheron gas field, where drilling began recently which, Socar tells NGW, has now reached 1,050 meters depth.
Equinor's Caspian interests offshore Azerbaijan (Map credit: the company)