Winter 1997 (5.4)
LUKOIL Signs Contract
The D-222 Prospect
On July 3, 1997, LUKoil signed a Production Sharing Agreement (PSA) with SOCAR (State Oil Company of Azerbaijan Republic) for the exploration and development of the prospect which is presently identified simply as D-222. This was the fourth contract that LUKoil has signed with Azerbaijan for projects in the Azerbaijan sector of the Caspian Sea. It was the sixth contract that has been signed between SOCAR and foreign oil companies since 1994. Since July 1997, SOCAR has signed three additional contracts with the American companies in the U.S. White House - Chevron, Mobil and Exxon.
Left: Fikrat Aliyev, Manager of LUKoil in Baku.
The signing of the D-222 Contract in Moscow on July 3, 1997. Left to right, SOCAR President Natig Aliyev, Azerbaijan President Heydar Aliyev, Russian President Boris Yeltsin and LUKoil President Vahid Alakbarov.
LUKoil's Signing Ceremony took place in the Kremlin in Moscow in the presence of President Boris Yeltsin of Russia and President Heydar Aliyev of Azerbaijan. The D-222 contract was ratified by Azerbaijan's Parliament (Melli Majlis) on November 3, 1997, and has an effective date beginning November 4. Investment for this project is expected at $2 billion for estimated reserves of 100 million tons of oil and 15 billion cubic meters of gas. LUKoil's share is 60 percent and SOCAR's is 40 percent.
Upper Left is D-222 prospect which will be developed by LUKoil and SOCAR.
LUKoil's share is 60% and SOCAR's share is 40%.
Exploration of two wells will take place over four years with the possibility of extending the drilling period for two additional years if necessary. Oil is expected to flow by the year 2007. The D-222 prospect is the northernmost field for which a contract has been signed with SOCAR. It extends over an area of 1,000 sq km and is located at sea depths ranging from 40 to 620 meters. The depth of the productive layer is estimated at 4,200 meters.
LUKoil, a major Russian oil company, is rated as the world's fourth largest oil producer with the world's largest proven oil reserves at 2 billion tons. This company has been involved in Azerbaijan since 1993 and already a participant in three consortiums (1) AIOC (Azerbaijan International Operating Company) for the development of Chirag, Azeri and deep-water Gunashli prospects, (2) CIPCO (Caspian International Petroleum Company) for the Karabakh prospect and (3) the Shah Daniz Consortium.
In addition to LUKoil's activities in the oil industry, it is involved with numerous other entrepreneurial projects, including a network of petrol stations in Azerbaijan, telecommunications (AzEuroTel), insurance (Ateshkah), humanitarian activities (LUKoil charity fund) and the issuance of gasoline (petrol) credit cards (LICARD).
3 Sabir Street
Ichari Shahar (Inner City), Baku
Tel: (99-412) 92-32-35; Fax: 93-48-30
From Azerbaijan International (5.4) Winter 1997
© Azerbaijan International 1997. All Rights Reserved.
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