Summer 1999 (7.2)

SOCAR:
Three More U.S. Contracts Signed

Three new oil contracts were signed in Washington, D.C. on April 27, 1999, during President Aliyev's official visit to the U.S. They include the following:

Zafar-Mashal
ExxonMobil Exploration and Production Caspian Sea Limited is the operator of the Zafar-Mashal block in the Azerbaijan sector of the Caspian Sea. President of ExxonMobil Ventures K. Terry Koonce signed the contract along with Natig Aliyev, President of SOCAR.

ExxonMobil has a 30 percent interest in the block, SOCAR holds a 50 percent interest and the remaining 20 percent has yet to be awarded. The deepwater offshore exploration block includes both the Zafar and Mashal prospective structures (previously known as D-9 and D-38) and is located about 75 miles (110 km) southeast of Baku. It is located in water depths ranging from about 1,800
feet (550 m) to 2,900 feet (900 m) and covers about 250 square miles (640 sq km).

ExxonMobil's President Terry Koonce confirms the contract for Zafar-Mashal with Natig Aliyev, SOCAR's President. All contracts were signed on April 27, 1999 in the U.S. Senate Building.

ExxonMobil affiliates in Azerbaijan also own interest in the Nakhchivan exploration block, the Araz-Alov-Sharg exploration block and the Azeri, Chirag and deepwater Gunashli fields complex. ExxonMobil Azerbaijan Ltd. is a member of the AIOC consortium. The company is active in providing support for education and humanitarian projects in Azerbaijan.
Note: Conoco now holds 20% share in Zafar-Mashal as of 2000.

Lerik
ExxonMobil is the operator for the Production Sharing Agreement (PSA) for exploration of an offshore block in the Azerbaijan sector of the Caspian Sea. ExxonMobil's Executive Vice President Bill Scoggins signed the contract along with Natig Aliyev, President of SOCAR (State Oil Company of the Azerbaijan Republic).

The block contains the Savalan, Dalga, Lerik-Daniz and Janub prospects, covering an area of
approximately 316 square miles (850 sq km). ExxonMobil has a 30 percent interest in the block, SOCAR holds a 50 percent interest, and the remaining 20 percent has yet to be awarded. The PSA calls for a seismic program and two exploration wells to be completed over the first three years of the agreement.

Bill Scoggins, ExxonMobil's Executive Vice President President signs with Ilham Aliyev, Executive Vice President of SOCAR for Lerik.

Padar
Moncrief Oil International, Inc. (MOIL) of Texas, through its affiliate, Kura Valley Development Company, Ltd., signed an Exploration and Development Production Sharing Agreement (EDPSA) for the Padar and adjacent onshore area in the Lower Kura River Valley. The area is located 90 km southwest of Baku and encompasses approximately 1,050 sq km with a 40 percent relinquishment provision after 1 year. The minimum work program consists of three exploration wells over the course of three years. Ownership in the block consists of MOIL and its partner ISR of Azerbaijan (80%), and SOCAR (20%), with MOIL as the operator. The EDPSA block contains the Padar structure, Kharami structures, as well as a number of other geologic features of interest.

The Contract was signed by SOCAR President Natig Aliyev and Moncrief Oil International, Inc. Chairman Richard W. Moncrief.Moncrief anticipates assuming operations in the block in the fall of 1999 upon ratification of the contract by Azerbaijan's parliament. Azeri experts estimate potential recoverable reserves to be up to 100 million tons. If successful, total capital expenditures for the development of the area are in the range of $500 million to $1 billion over the life of the project.

Richard Moncrief of Moncrief Oil with Natig Aliyev of SOCAR at the Signing Ceremony for Padar.

Moncrief Oil is a privately owned family concern which has been producing oil and gas in the U.S. for over 60 years and is headquartered in Fort Worth, Texas. Moncrief has discovered and played a prominent role in the development of numerous major oilfields in Texas, Louisiana, Alaska, Oklahoma, New Mexico, Utah, California, Florida, California, Montana, Wyoming, North Dakota, Alabama and Mississippi.

From Azerbaijan International (7.2) Summer1999.
© Azerbaijan International 1999. All rights reserved.

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