CONSORTIUMS

Drilling of the second hole of the first exploration drilling well is going to be started on "Inam" oil field

Preparatory works to drill the second hole of the first exploration drilling well is going to be finished at present on "Inam" oil field (BP Exploration (Inam) Ltd is an operator for the oil field exploration -editor ) drilling of which will begin on March 31 and will be carried out with the help of "Dede Gorgud", a semisubmersible drilling rig (SSDR), as it was stated by a press service of the operational company.

As it has been explained by a press service representative, the second hole the total depth of which should be 4350 meters, will be drilled from 2136 meters depth to facilitate drilling of the major hole of the well.

Drilling of the first exploration well on "Inam" oil field was started on the 21st of December of past year and stopped on the 14th of February, 2001 on 4442 meters depth because of pressure which was extremely high for the Dede Gorgud equipment. Presumptively, in the middle of summer of the current year the drilling operations will be proceeded with "Istiglal" SSDR, the power of a preventer of which is 1050 atmospheres. Designed depth of the first exploration well is 5025 meters at a depth of water of 137 meters.

Shareholders of the contract to explore the "Inam" Perspective oil field are : SOCAR (50 % of share), BP (25 %) and Shell (25 %) .

"Inam" is a big structure located approximately in 160 km to the south of Baku and 30 km away from Azeri coast of the sea. The depth of water varies there from 30 meters up to 300 meters. The structure was opened by the Azerbaijan specialists in early 90-th, and in 1992-93 the first exploratory activities were performed there, an exploratory well was drilled, but after 2000 meters depth was reached Azerbaijan oil men stopped drilling operations due to lack of means.

Drilling depth of the first exploratory well on "Absheron" structure is more than 4700 meters.

Drilling depth of the first exploratory well on "Absheron" perspective structure is more than 4700 meters, as it was stated by Khoshbaht Yusifzadeh, SOCAR vice-president.

Drilling operations on "Absheron" perspective structure to be conducted from "Istiglal" semisubmersible drilling rig (SSDR) by CDC Azery - American joint venture. Drilling of the first exploration well with the 6500 total depth was started on the 23rd of December of the last year. It is planned to complete the operations in the well by May - June of the current year. After that "Istiglal" SSDR will be moved to "Inam " oil field to continue drilling operations on the first exploratory well.

Contract on "Absheron" oil field was signed on the 1st of August 1997 in Washington DC and ratified by Milli Medjlis in December of the same year. The Contract participants are SOCAR (50%), Chevron American Company (30% - operator) and TotalFinaElf French Company (20%).

"Absheron" deep water perspective structure (water depth is 450 - 500 m) was discovered by seismic survey in 1960, and in 1993 was prepared to start prospect drilling. It is located in 85 km south-east Baku. The structure is located 40 km south-west of "Azeri - Chirag - Guneshli" Contract Areas with 250 - 650 m water depth in the south part of the Caspian sea.

The structure size is 40 km length and 7 km width, area of 205 square km. Productive horisons are found in 4800-7100 m depth. Oil reserves are estimated within 120 million ton of oil and 3 trillion cubic meter of gas

According to some estimations cost of capital investments into the project can be from 3 to 4 billion USD. The contract validity is 30 years. Hydrocarbon production will begin not earlier 2004-2005.

In April AIOC to be start seismic survey on "Azeri" oil field.

As it was reported to "Turan" Media Agency in the International Consortium the Azerbaijan International Operating Company (AIOC) will start to run seismic survey on "Azeri" oil field in the first decade of April in order to study geological structure of productive stratum more carefully.

Within "Phase - 1 " project. It is planned to get the first oil from the "Azeri" oil field by the end of 2004 under the large scope exploration of "Azeri - Chirag - Guneshli" oil field. Two fixed platforms will be constructed on the field - one is for 48 wells to produce oil and the other one is technical - for water injection.

AIOC shareholders have favourable terms to join a Main Export Pipeline (MEP) sponsor group

TotalFinaElf Company is interested to participate in Sponsor Group (SG) to realize the construction project Baku - Tbilisi-Ceyhan of MEP and due to this applied to SOCAR. But the Company is going to start direct negotiations only after estimation of the oil reserves in the projects which it participate in. It was reported by Jean -Pier Dolla, Chief of Baku representation, to "Turan" Media Agency. As he said the AIOC shareholders have more preferable conditions to join SG rather than other companies.

At present in addition to TotalFinaElf French Company Alberta Energy Canadian Company and Chevron American Company also show their real interest to MEP project. Considering preliminary data increase of the Sponsor Group may be expected in May of the year.

* TotalFinaElf Company participate in 3 projects: "Lyankaran/Talysh - Deniz" (35% of share, operator), "Shah - Deniz" (10%) and "Absheron" (20%).

** The following Companies participate in Sponsor group at present: SOCAR - 50% of share, BР - 25,41%, Unocal - 7,48%, Statoil - 6,37%, TРAO - 5,02%, Itochu - 2,92%, Ramco - 1,55%, Delta НESS - 1,25%.

JAOC is completing seismic data interpretation on " Ateshgyakh " area.

Consortium of Japanese companies (JAOC) to be finish in a week seismic data interpretation which were received after geophysical surveys held on a shallow water part of "Ateshgyakh" - "Yanan - Tava" - "Mughan-Deniz" contract unit. Representatives of JAOC Media-Press rejected to report the preliminary results of the survey saing that it is too early to comment the results.

Let's remind that JAOC on the basis of its Baku office independently carries out seismic data interpretation. The general area of the unit is 510 square km.

JAOC is planning to start drilling of the first well on the contract unit at the beginning of the next year by use of "Gurtulush" SSDR. It is planned that the first oil would be received in 2008. According to SOCAR specialists' view the area reserves are estimated for 75 - 90 million ton of oil. Sum of investments into the project is estimated as 2.3 milliard USD

TotalFinaElf have chosen a wrong location for drilling of the first exploratory well on "Talysh-Deniz " oil field

TotalFinaElf French - Belgium company together with the American Transocean SedcoForex general drilling Contractor have chosen the wrong location for the first exploratory well on "Talysh-Deniz " oil field. That was a meening of SOCAR Media-Press representatives. They explained that a geological structure of the field was very complicated and therefore the drilling point location had to be determined more carefully. The well bore leaves in vacuum in an oil productive stratum and hydrocarbon are away from it..

SOCAR stated that Azeri specialists expressed their opinion on that issue for several times to TotalFinaElf specialists but the Company replied that they are able and have right to to take a decision where to drill by themselves. "The data interpretation received from the well can be of a very disappointing results inspite of the fact that the reserves on the contract area are estimated approximately in 110 million ton of oil" as it was stated in SOCAR.

Let's remind that Transocean SedcoForex re-started drilling of the first well. While drilling for the first time the drilling operations were stopped at 1029 meters depth because of strong drilling mud loss. Due to that one of the pier "legs" of "Gurtulush" SSDR (Trident-20) immersed in bottom of the Caspian sea to 27 meters ( the total length of the pier is 69,5 meters). The new well is 1200 meters far away from that point.

"Transocean SedcoForex had to work in a more close contact with Azeri specialist and attract them to contract works because they have a big drilling experience on the Caspian sea" - this is a meaning of SOCAR authorities.

Drilling of the first well on "Talysh-Deniz" area started last year on the 22nd of October. It was designed to complete the drilling operations within 75 days but now the new well can be completed only in the middle of April. The next evaluating well, which is obligatory to be drilled upon the Contract, will be located on "Lyankyaran - Deniz" area. Its drilling also will be done from "Gurtulush" SSDR and is scheduled to the III Quarter of 2001.

Upon completion of the above well drilling SSDR will be moved to a perspective "Oghuz" area to start drilling of the first exploratory well which is within a Contract of PSA type signed between SOCAR and ExxonMobil American Company. Drilling operations, where included also location of the drilling rig on the drilling point, are scheduled to complete less than 60 days. The well is designed to be drilled on about 45 km east to Absheron peninsula and less than 5 km away from "Neft Dashlari" oil field operating by SOCAR. Designed depth of the well is 3480 meters where the water depth on the drilling point is 66 meters.

The major aim of the drilling is to evaluate oil / gas productivity of the stratum ("Balakhany suite" , "Pereryv suite", "NKP" and "KP" suites.

"Lyankyaran - Talysh - Deniz" structure Contract shareholders are TotalFinaElf - 35%, SOCAR - 25%, German Whintershall - 30%, Iran OIEC- 10%. The total investments sum into the project is estimated as 2 milliard USD.

LUKOIL intends to extend duration of the exploratory period on perspective structure D-222 until "Shelf -7" SSDR upgrade completion

LUKOIL Russian Oil Company intend to apply to SOCAR to extend exploratory period for "LUKARCO Oрerating Comрany Ltd" as it was reported to journalists by Mr. Vaghid Alekperov, President of the Russian Oil Company,

According to his words at present LUKOIL run a tender to carry out upgrade of "Shelf -7" semisubmersible drilling rig. It is planned that the tender results will be summurized in the shortest time. The upgrade project of "Shelf -7" is estimated as 250 million USD. V. Alekperov noted that after the completion of all the works and "Shelf -7" launch the rig will start the drilling operations just on D-222 perspective structure.

As Leonid Fedun, LUKOIL vice-president, said to journalists some part of the works on the rig modernization can be carried out on Azerbaijan territory. Mr. Fedun has also underlined that at present there is no any drilling rig on the Caspian sea which is able to drill up to 800 meters in the water depth, and due to that the necessity to have the new drilling rig is very high.

* The contract on exploration and development of the D-222 unit was signed by SOCAR (40 %) and LUKoil (60 %) on July 4, 1997 in Moscow, within the framework of official visit of Heydar Aliyev, the President of Azerbaijan Republic to Russia.

The D-222 unit (length of 30 km, width about 20 km) starts close to the coast and extends to the sea. The depth of water on the contract area varies from 100 up to 600 meters. The perspective hydrocarbon beds, according to the Azerbaijan geologists surveys, are arranged on depth of 3000-4500 meters