Page 12 - FSUOGM Week 12

FSUOGM PROJECTS & COMPANIES FSUOGM
SOCAR, Equinor strike oil in the Caspian Sea
AZERBAIJAN
The area was explored by international companies in the
late 1990s but was abandoned.
AZERBAIJAN’S SOCAR has reported an oil discovery 120 km off the shore of Baku, which it says has commercial potential.
The national oil company (NOC) is partnered with Norway’s Equinor at the Karabagh (Kara- bakh) block, under a risk-service agreement (RSA) they signed in May 2018. Each firm has a 50% stake in the venture.
The newly discovered field, also named Kara- bagh, contains 60mn tonnes (440mn barrels) of oil, SOCAR said on March 19, without disclosing how much of these resources were recoverable. Equinor is yet to confirm the find.
A possible oil structure at Karabagh was iden- tified with seismic surveys back in 1959, but the site was left untouched for decades because of its distance from the shore and significant water depth,rangingfrom150to200metres.
US independent Pennzoil, Russia’s Lukoil and Italy’s Agip signed a contract with SOCAR to explore Karabagh in 1995, and formed a joint venture, Caspian International Petroleum Co. (CIPCO). The group drilled three wells at a cost of $120mn, two of which found gas and the third oil.
The investors withdrew from the field in 1999, however, after finding less oil than antici- pated. That year Brent oil averaged less than $18 per barrel.
The project was revived when Equinor, then known as Statoil, agreed in 2018 to carry out joint
studies with SOCAR over a two-year period at Karabagh and the Ashrafi-Dan-Ulduzu-Aipar (ADUA) exploration area, which had also been abandoned by a BP-led consortium in 2000 after a string of exploration failures.
Equinor also signed a production-sharing agreement (PSA) with SOCAR to explore the ADUA block in 2018, but the pair are yet to com- mence drilling.
Under the Karabagh RSA, the partners spud- ded their first well in late December, at a water depth of 180 metres, using the Dada Gorgud semi-submersible rig owned by SOCAR’s subsid- iary Caspian Drilling Co. (CDC). They encoun- tered a reservoir 3.4 km below the seabed.
“The estimated size of the discovered vol- umes of oil and gas are satisfactory for pursuing commercialdevelopmentoftheKarabaghfield,” SOCAR said.
How quickly development could go ahead will depend upon how quickly the international oil market recovers. Prices have fallen steeply this year as a result of the coronavirus (COVID-19) pandemic’s continuing spread and the collapse of OPEC+ talks. Equinor and other international oil firms have responded to the crisis by drasti- cally scaling back investments.
Equinor and SOCAR are also both members of the BP-led consortium developing Azerbai- jan’s largest oil project, the Azeri-Chirag-Gu- nashli (ACG) fields.™
P12
w w w . N E W S B A S E . c o m Week 12 26•March•2020