Summer 1997 (5.2)
Terry Adams, President
AIOC (Azerbaijan International Operating Company), a consortium composed of 11 major foreign oil companies and SOCAR, is committed to the development of the Azeri, Chirag and deep-water Gunashli oil fields in the Azerbaijan sector of the Caspian. The Production Sharing Agreement (PSA) was signed on September 20, 1994, enacted into law by the Azerbaijan Parliament on December 2, 1994, and became effective on December 12, 1994. The PSA is for 30 years. The contract area has estimated reserves of 4 billion barrels of oil.
Over the past 2 1/2 years, AIOC has made outstanding progress in its completion of the nine obligations under the 30-month Minimum Obligatory Work Program which ends June 12, 1997. To date, AIOC has completed: (1) 3-D seismic survey, (2) appraisal drilling site surveys, (3) environmental baseline survey, (4) upgrade of drilling rig, (5) upgrade of supply vessels, (6) study of Early Oil export options, (7) and Chirag-1 platform evaluation for suitability for Early Oil production scheme. Two obligations remain: the drilling and testing of three appraisal wells and the study of issues relating to a main export pipeline.
The drilling and testing of two appraisal wells have yielded encouraging results, and the third well is underway. The routes of two export pipelines for Early Oil to the Black Sea have also been identified: one runs north through Russia, and the other to the west through Georgia. The Azerbaijan section of the northern pipeline is complete all the way to the Russian border, and transportation of Azerbaijani oil is expected to commence before October 1997. AIOC has begun refurbishment of the second pipeline through Georgia, which is scheduled for completion by the end of 1998.
AIOC expects to be fully operational offshore soon. Drilling of First Oil with the refurbished Chirag-1 platform should commence as expected in the Autumn of 1997.
2 Neftchilar Prospect (Bayil)
From Azerbaijan International (5.2) Summer 1997.
© Azerbaijan International 1997. All rights reserved.