Azerbaijan International

Autumn 1996 (4.3)
Page 42

Caspian International
Petroleum Company
Formed for Exploration, Development of Karabakh Prospect

BAKU, June 4, 1996-Caspian International Petroleum Company (CIPCO) has been incorporated as the joint operating company for the contractor parties for the exploration, development and production sharing for the Karabakh Prospective Structure and area adjacent in the Azerbaijan sector of the Caspian Sea.

The contractor parties to the Karabakh Production Sharing Agreement are LUKAgip (45%), Pennzoil (30%), LUKoil (12.5%), SOCAR (7.5%), and Agip (5%).

James A. Tilley of Pennzoil has been named President of CIPCO. Other officers include Andrea Chiura of Agip, Senior VP for Operations, and Pavel Kaufman of LUKoil, Senior VP for Finance and Human Resources.

CIPCO has opened its office in Baku on the 5th floor of the Old Intourist Hotel. Initially, CIPCO's task is to fulfill the seismic program and exploratory drilling program. Progression from that time onwards depends on results of the exploratory work.

The Karabakh structure is approximately 80 km (50 miles) offshore Azerbaijan in water depths ranging from 160 to 200 meters. It is 20 km (12 miles) north of the Azeri, Chirag and deepwater Guneshli block which is being developed by Azerbaijan International Operating Company (AIOC), of which LUKoil and Pennzoil are members.

Under terms of the Production Sharing Agreement (PSA) agreed to November 1995, the work commitment includes a seismic program and exploratory drilling over a period of three years which can be expanded an additional 1.5 years if further work is needed.

Should commercial hydrocarbons be discovered, the agreement will have a development and production period of 25 years, which may be extended an additional five years.

Tilley (Pennzoil), a 27-year veteran of the oil and gas business, has been President of Pennzoil Caspian since November 1995 following a 26-year career with Conoco, and a year as a consultant and advisor to American and Russian business. While at Conoco, he also served on the Board of Directors of the Polar Lights Project, a joint venture with Arkhangelskgeologia and the first western oil company to develop a "new" oil field in Russia. He was also on the Board of Directors of Northern Petroleum, another joint venture with Arkhangelskgeologia in the Yuzhno Kilchuyu field. Tilley has accumulated 19 years of international oil and gas experience in Libya, Holland, Dubai, Russia and now Azerbaijan.

Chiura (Agip) brings 20 years of drilling and management experience to CIPCO. He earned a degree in Geological Sciences and joined Agip in 1976. After three years of field experience as a drilling supervisor both onshore and offshore, he was assigned to the home office as a drilling engineer. He held progressively more responsible positions, such as Drilling Engineering Section Head (Libya), Operations Manager for North Sea Exploration (Norway), Drilling Engineering Manager for Foreign Activity (Italy) and Chief of Department Operations (Tunisia). He returned to the head office in December 1992 as Drilling and Completion Coordination Manager for Domestic and Foreign Activities and held that position until being named to the consortium management team.

For Kaufman (LUKoil), joining the Consortium marks his return home. He was born in Baku in 1948 and attended the Azerbaijan Institute of Oil and Chemistry named after M. Azizbekov (now the Oil Academy) where he studied economics and organization of the oil industry. He earned the diploma of Engineer-Economist. After graduation, Kaufman started his career as an engineer at Oily Rocks in 1972. He worked at the Oil and Gas Production Department named after N. Narimanov in Azerbaijan, from 1973 to 1977. He then was named Deputy General Director on Economy of "Tomskneft" in Western Siberia. He was President of the Joint Stock Company Sibneftegas-Siberian Oil and Gas Company, a LUKoil subsidiary, from 1992 until earlier this year, when he was named a General Director of LUKoil-Chirag (Azerbaijan).

Azerbaijan International (4.3) Autumn 1996.
© Azerbaijan International 1996. All rights reserved.

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