Page 9 - FSUOGM Week 04 2020

FSUOGM PROJECTS & COMPANIES FSUOGM
Lukoil eyes expansion in Azerbaijan
AZERBAIJAN
Azerbaijan has sought partners for both blocks in the past.
RUSSIA’S Lukoil has signed a memorandum of understanding (MoU) with Azerbaijan’s SOCAR on new joint projects in the Caspian Sea.
The document was signed during a meet- ing between Lukoil CEO Vagit Alekperov and SOCAR president Rovnag Abdullayev at the World Economic Forum in Davos on January 22.
In a statement, SOCAR said the MoU cov- ered joint work at the Nakhchivan block and other offshore areas. A day before the signing, Alekperov also met with Azeri President Ilham Aliyev. The pair discussed the joint develop- ment of Nakchivan and Azerbaijan’s offshore Goshadash block, and “adopted a decision on the issue.”
Nakhchivan and Goshadash were first iden- tified as prospective areas by Soviet geologists in the 1960s. Azerbaijan has held talks with several international investors on joint exploration of the sites since its independence in 1991.
Nakhchivan is situated 90km south of the Absheron Peninsula, in waters 120-750 metres deep. SOCAR teamed up with ExxonMobil in the late 1990s to investigate the area’s potential, but the US major pulled out after the pair drilled a dry well. Germany’s RWE Dea later discussed
entering the project, without consequence. Azeri authorities have claimed that Nakh- chivan could hold 300bn cubic metres of gas and 40mn tonnes of condensate. But a positive well
result is needed to confirm this potential. SOCAR signed a MoU with Malaysia’s Petro- nas to explore Goshadash, located 20km north- east of Sumgait, in late 2016. But the pair did not finalise a development contract. Then in Sep- tember 2018 Azerbaijan reached an agreement
on joint studies at the block with Russia.
Lukoil is already a shareholder at Shah Deniz, Azerbaijan’s largest gas field. The company also has monopoly over oil production in the Russian zone of the Caspian. It currently operates two producing fields, Korchagin and Filanovsky, and plans to bring a third on stream, Rakushechnoye,
in 2023.
In addition, the private producer is part-
nered with Kazakhstan’s KazMunayGas (KMG) at the undeveloped Khvalynskoye and Tsentralnoye fields straddling the border between Russian and Kazakh waters of the Caspian. In the past year it agreed on joint exploration with KMG at two Kazakh blocks, Zhenis and I-P-2.™
Lukoil asks for more Caspian access
RUSSIA
Lukoil has invested $6.1bn in the Russian Caspian to date.
RUSSIA’S Lukoil wants to widen its search for oil and gas in the Caspian Sea, having report- edly requested exploration rights to three more blocks in the area.
Company head Vagit Alekperov wrote to Russian President Vladimir Putin asking for licences to the Tyuleniy-1, Tyuleniy-2 and Tyuleniy-3 blocks, in the vicinity of Tyleniy Island, Kommersant reported on January 28, claiming to have seen a copy of a letter. Alek- perov explained that Lukoil “was experiencing a shortage of new exploration projects” in the Caspian, proposing that the blocks be issued without a tender.
Putin has referred the matter to Russian Nat- ural Resources Minister Dmitry Kobylkin, Kom- mersant said.
Lukoil is the only producer in the Russian zone of the Caspian. The company first entered the area in 1995 and within a decade had found six promising oil and gas fields. These included Korchagin (discovered in 2000), Khvalynskoye (2000), Rakushechnoye (2001), 170 Km (2001), Kuvykin (2002) and Filanovsky (2005).
Korchagin started production in 2010, fol- lowed by the larger Filanovsky field in 2016. The pair currently flow around 140,000 barrels per
day (bpd) of oil. Lukoil aims to bring its next Cas- pian project on stream, Rakushechnoye, in 2023. It is due to yield 24,000 bpd at peak capacity.
The remaining fields, which are mostly gas-containing, are expected to come onstream in the late 2020s and early 2030, although Lukoil is yet to take any final investment decisions (FIDs) on their development.
In his letter, Alekperov stated that Lukoil had drilled 26 exploration wells in the Caspian to date, while investing a total of RUB381.5bn ($6.1bn) in projects in the region. It plans to sink a further four wells and collect 3,000 square km of 3D seismic data over the next three years.
Lukoil is also involved in the Caspian projects off the coast of Azerbaijan and Kazakhstan.™
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