Socar, Statoil Ink Small Caspian Fields Deals

Azerbaijan’s state-run oil company Socar and Norway’s Statoil have signed two contracts on main principles of co-operation to develop small offshore oil and gas deposits.

As a result of long discussions and consultations, specialists developed and agreed upon the main principles of prospective cooperation related to a risk service contract (RSC) for the development of the Karabakh deposit with 16mn mt oil and condensate as well as 28bn m³ gas reserves, as well as a production-sharing agreement (PSA) on various prospective structures, Socar said December 20.

Before, Statoil submitted its 3D systemic survey on Karabakh as well as Ashrafi and Dan-Ulduzu gas fields to energy ministry. The total gas reserves of these fields had been estimated at 35-40bn m³ in 1990s, but Socar's vice president for geology and geophysics Bahram Huseynov told NGW that the old surveys on these offshore fields were incomplete and the potential reserves may be higher than past estimations.

The deputy head of Azneft – the production unit of Socar – Dashqin Iskandarov also told NGW that the work on a platform for Karabakh is projected to start in 2018 and the field is expected to become operational in 2021. Earlier Socar CEO Rovnag Abdullaev said that engineering and prospecting works have already been completed and a place for the platform has been determined. At present, the feasibility study of the project is being prepared.

The three fields are all expected to become operational in 2021 with 1.5bn m³/yr capacity together. Statoil had been a member of the giant Shah Deniz gas field consortium with stakes in related gas pipelines, but sold out to return cash to shareholders a few months after the oil price crash in the summer of 2014.