Spring 1998 (6.1)
by Khoshbakht Yusufzade, VP of SOCAR
The first discussions regarding cooperation in oil projects between Iran and Azerbaijan began in 1986. By the following year, a group of Azerbaijani oil experts under my leadership went to Tehran and signed two contracts with the National Oil Company of Iran, regarding the initial stages of the geological studies which resulted in 30 specialists from the Charait ship getting involved and successfully completing those two contracts worth $1.2 and $1.3 million respectively.
It should be noted that back in 1966-1968, Azerbaijani geophysicists under the leadership of A. M. Shakinski, who presently heads the State Committee of Geology and Mineral Reserves, discovered 44 structures in the Iranian shelf zone of Caspian and notified Iran.
The National Oil Company of Iran then requested that the Caspian oilmen drill a test well. In 1988 Azerbaijani experts headed by engineer R. Hagverdiyev together with Iranian specialists prepared the project of the first oil well that was supposed to be drilled in Iran's western section of the Caspian shelf. This activity took place 12 km from the city of Anzali at a sea depth of 23 meters. The well was to be drilled 6,000 m at a cost of $27.5 million.
On May 29, 1989, I led a team of experts from Moscow and Baku to sign a contract with Tehran for this project. Drilling was to have been completed in 20 months. On September 5, 1989, the drilling began under a team led by O. Salimkhanov from the semi-submersible drilling rig, Khazar - 2. The cargo ships of the "neftgas" type plus the Babazade passenger ship and fire-fighting ship, Vikhr - 9, also participated. About 200 specialists and workers were employed on this ship.
This was the first oil well to be drilled in the Iranian Caspian shelf. All the geophysical and drilling works for this well were done by the Khazardanizneftgeofizika trust, which is part of SOCAR (State Oil Company of Azerbaijan Republic. However, oil or gas on a major industrial scale was not found. On May 7, 1991, drilling stopped at a depth of 5,570 m. Geophysical research confirmed that the layers were filled with water and some gas. The extraction of water together with gas during the tests of the layers showed that different parts of this oil well structure and other nearby structures could fill with hydrocarbon products under favorable geological conditions.
In 1989, the National Oil Company of Iran and our trust started discussing further seismic studies in the Iran sector of the Caspian Sea. In May 1991, a $5 million contract for the seismic studies in the western and the eastern parts of the Iran sector was signed. The studies were completed by January 1992
On May 7, 1994, I led another group of Azerbaijanis to Tehran and signed two more contracts between SOCAR and the National Oil Company of Iran. The first one was for the "Complex works in engineer-geology spheres in the eastern section of the Iranian shelf of the Caspian Sea," and the second for "Seismic exploration works in the Caspian Sea."
The exploration works were carried out in two areas by the exploration ship, Valiyev. According to other contracts and the order of National Oil Company of Iran, seismic studies (at an estimated cost of $2.1 million ) were carried out by ships, Geofizik 2 and Seysmorazvedchik, in the Iranian shelf of the Caspian Sea.
This was the beginning of major work that would be carried out in the Iranian shelf of Caspian Sea. A new contract was signed for the drilling of the first oil well in the area of Mehdad. The depth was 4,500 m at an estimated cost of $14.5 million. Around 220 Azerbaijan experts and workers were involved. Later, we received instructions to continue drilling to 6,000 m and on October 5, 1996, drilling reached 5,767 m.
Iran Involved in Azerbaijan
The decision in which location to drill the first well in the Shah Daniz structure (at projected depths of 6,200 m) is the result of cooperation of SOCAR and Iranian experts together with the other major oil companies of the world. The areas had already been determined in this prospective structure for executing the initial engineer-geology works. Geotechnical works are planned to be completed by April or May of this year. Drilling should begin in June.
In addition, other contracts signed between Azerbaijan and Iran are aimed at the expansion of cooperation during the execution of the works. This can be observed in the areas of new prospective structures of Lankaran / Talysh Daniz. The company, Elf Lankaran Talysh, has been formed on the basis of the contract signed on January 13, 1997. Iran also holds a 10 percent share in this project.
Recently, SOCAR experts and oil representatives from the Islamic Republic of Iran have held extended discussions. The result is that the both sides have agreed on the execution of engineer-geology and geochemical explorations in the Iran sector of the Caspian Sea. In this connection, the management of Complex Geology Discovery has prepared a program of these works which will need to be documented legally by the Iranian side.
Recently, the Danizgeofizikkashfiyyati Trust signed another contract with Iran for seismic studies in prospective structures of the Iran sector of the Caspian Sea. Work should begin in the nearest future.
Since 1993, around 1.1 million
tons of diesel fuel has been sent to Iran every year. We look
forward to continued cooperation with the National Oil Company
of Iran along with other major international oil companies from
all over the world.