Summer 2003 (11.2)
/ Yalama Project Expands
Left: President of SOCAR Natig Aliyev and
President of OAO Lukoil Vahid Alakbarov signing the package of
agreements on additional terms for exploration and exploitation
of perspective sea block D-222 (Yalama) located in the Azerbaijan
sector of the Caspian Sea.
On April 4, 2003, Natig
Aliyev, President of State Oil Company of the Azerbaijan Republic
and Vahid Alakbarov, President of Open Joint Stock Company of
Lukoil company signed a package of agreements on additional terms
of exploration and development of prospective sea block of D-222
Yalama. This project is located in the northern part of the Azerbaijan
economic sector of the Caspian.
As Fikrat Aliyev Representative of the President of Open Joint
Stock Company of Lukoil in Azerbaijan, Georgia and Turkey said,
"The PSA for exploration, development and share division
of the product" from the contract areas was originally signed
on July 3, 1997, in Moscow during the official visit of the President
of the Azerbaijan Republic Heydar Aliyev to the Russian Federation.
The contract area consisted of 1,287 km2. The contract was ratified
by Milli Majlis (Parliament) on December 10, 1997.
Caspian Geophysical, "Petro-Alliance" and "Soyuzmorgeo"
have conducted large-scale geological research and seismic work.
Detailed interpretation of the results of seismic researches
(2D and 3D), the evaluation of the structure of the block and
the natural borders of the perspective oil and gas area structure
showed that the actual structure extended beyond the contract
area which was identified in 1997.
As a result, Lukoil approached SOCAR to expand the contract area
up to 3,037 km2. This was negotiated and agreed upon and signed
on April 4. The share partnership of Lukoil has been increased
from 60% to 80%. SOCAR's share, which was 40%, has now been reduced
Fikrat Aliyev pointed out that the block D-222 is the component
of the largest perspective hydro-carbon structure of Yalama in
the northeast part of the Caspian. This current structure is
located approximately equally between Azerbaijan and Russian
economic sectors of the Caspian Sea at a distance of 30 km offshore.
The depth of the Sea in the region of perspective structure of
Yalama ranges between 80 and 700 meters. Drilling of the first
exploration well will take place in the second half of 2004.
On April 4, Vahid Alakbarov, President of Open Joint Stock Company
of Lukoil emphasized: "The activization of the works regarding
the Yalama project correspond with our strategy connected with
the necessity of concentration of financial and technical resources
of the Company on the international projects in which the company
is the operator. In fact, with this agreement Lukoil is expanding
its activities in Azerbaijan, considering Azerbaijan as it did
in the past as one of the strategic regions of its activities."
Fikrat Aliyev is convinced that increasing the contract area
of Yalama to more than twice its original size gives Lukoil and
SOCAR a very good chance to find hydro-carbon reserves in the
northern areas of the Caspian Sea shelf which had not been developed
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AI 11.2 (Summer 2003)
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