Azerbaijans guarantees to BPs new offshore Caspian project have come into force
Baku, Fineko/abc.az. By Decision №44 of Azerbaijan Cabinet of Ministers from 28 March 2011 there have been approved the country governments guarantees and liabilities under PSA contract for exploration, development and production from Shafag and Asiman sea block in the Azerbaijani sector of the Caspian Sea.
The Cabinet of Ministers informs that under the contract the guarantees and liabilities have come into force.
The contract of PSA type for exploration and development of structures Shafag and Asiman in the Azerbaijani sector of the Caspian Sea, which bore before notations D8 and D10. was signed by president of the State Oil Company of Azerbaijan (SOCAR) Rovnag Abdullayev and BP Azerbaijan’s president Rashid Javanshir on 7 October 2010.
The contract offers equity stake parity (by 50%) to transform into joint operatorship by the period of development.
The PSA is designed for 30 years with a possibility of extension by another five years. Mandatory exploration period is 4 years, during which the contractor must drill at least 1 exploration well, and one well within the mandatory period may be drilled by mutual agreement of the parties. The exploration period can be extended for another 3 years to drill 2 more exploration wells. Minimal geological exploration was conducted on the structures, and their current reserves are estimated in 500 bon cu m of gas and 65 million tons of condensate.
On 13 July 2009 in London SOCAR president Rovnag Abdullayev and Andy Inglis, BPs chief executive of exploration and production, signed the Memorandum of Understanding (MOU) on the PSA, and on 6 July 2010 an agreement on main commercial principles of the PSA was signed in Baku
For Shafag/Asiman block development it is needed to choose technology for production of more than 7,000 m from wells under abnormally high pressure.
The two-structure block lies some 125 km (78 miles) to the south-east of Baku. Its covers an area of some 1 100 square kilometers and has never been explored before. It is located in a deepwater section of about 650-800 meters with reservoir depth of about 7 000 meters.
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