From the ancient time Azerbaijan is the home of oil. Oil and gas have been known here for many hundreds of years. 1848 marked history of Azerbaijan with first oil gusher.
That was seven years before the first gusher in the US's Pennsylvania in 1855.
By then oil in Azerbaijan has been gathered either from natural seepages or by buckets from hand-dug pits. We must not forget this. If not these heavy days in the history of Azerbaijan when people recovered oil in such difficult terms, Azerbaijan could not turn into the major oil country.
Fifty-three years ago Azerbaijani oilmen drilled the first oil well on the Caspian "Neft Dashlary" (Oil Rocks), oil gusher struck, discovered new oil fields on the Caspian sea.
We are pioneers of this business. Now at the end of XX-beginning of XXI Azerbaijan is first who gave the world an access to oil deposits of the Caspian Sea.
Heydar Aliyev
The President of Azerbaijan Republic
AZERBAIJAN NON-TYPICAL HYDROCARBONS REQUIRE SPECIAL TREAT
Akif Narimanov
Senior geologist of Offshore PA of SOCAR
Caspian Energy: How do you assess, from the standpoint of geology, operation of foreign companies in Azerbaijan sector of the Caspian?
Akif Narimanov: Large oil companies, more precisely giant oil companies, will never enter the campaign or project knowing nothing of a regional geology of the area. That is not theirs nature to believe our experts. They wish acheaching everything by theirs own. This credo is gained from substantial experience. That should be said, the international experience of these companies had been gained in the countries where people who have a car knew a great deal of oil, since those cars required oil products (benzene, diesel fuel, and lubes). In Azerbaijan they run into differ situation. We lag behind of technology but our knowledge does not yield to future partners in this respect.
I remember 1991, first official negotiations in Houston with a group of experts out of BP, Unocal and Amoco for development of technical aspects of the deal for Azeri field. That gave break out to further promotion. Our specialists were in good light in comparison with partners quite often making them to feel ill at ease. The partners were induced to take time-outs for discussions, to look in reference, manuals and scientific books. Once, in such moment, one our scientists (the late Faig Orujaliyev) told them: "Sirs, please take us on trust, since books you are looking in are written by us."
It should be said that foreign companies shortly made sure that from the practical standpoint Azerbaijan is very profitable for execution projects, engineering feasibility studies, for research activity both jointly with local specialists or employing an assistance of them. That increases data adequacy. But as a project operators they quite often take final decision individually remembering local experts only after facing negative results of the drilled well.
C.E.: At present, can we say our sector is studied at 100%?
A.N.: By force of objective reasons under the USSR a huge volume of onshore oil and gas output has been produced at low cost. There's no need to spend a heavy of funds to develop water basin of the country. On the Caspian, mainly in Baku, significant works were done to shot survey of the sea. But at that time we were working on the entire water basin excluding Iranian sector. Therefore, in consideration of works operated jointly with foreign partners, Azerbaijan sector of the sea is studied only at 17,5%. Another 1,5% portion of the water basin is studied partially, 56% of the basin is not tapped at all. And only 25% of the water basin can be referred as unpromising for searching commercially viable oil and gas reserves...
HISTORY OF BAKU - WORLD HISTORY OF OIL
The earliest authentic records on natural oil extraction on the Absheron peninsula are described in Alban letters and date back to 17th century. Meanwhile, special oil-lamps found by archeologists during construction works on Baku fortress walls and on destinations of ancient people on different parts of our country, kir coatings of houses in Shabram city on the coast of the Caspian sea nearby Baku and many other facts- are evidencing that oil in Azerbaijan, particularly on the Absheron peninsula, had been known and used in householding from the ancient times.
There is no exact records on first oil pit. But undoubtedly the oldest hand-dug "Khalafi" in Balakhany with depth of 13-14 sazhen which daily production averaged 100 poods of oil over three centuries had been dug as far as in 16 century.
The Arabian pundit Masud Abdul Hasan ibn Huseyn who visited Baku in first half of 10th century wrote that there had been 2 main oil sources - one source had been giving yellow and white oil, another - black and dark blue oil...
KAZAKHSTAN AND AZERBAIJAN - DOMINANTS IN CASPIAN OIL PRODUCTION TILL 2015
IN CASPIAN RESERVES:
CHEVRONTEXACO CORP. RANKS FIRST OAO LUKOIL RANKS AHEAD OF BP Proved hydrocarbon reserves of the Caspian region are mounting. To date these reserves are proved to be 7,8 billion barrels, told the head of the Italy's concern ENI Gian Maria Gros-Pietro on the economic forum in Almaty. According to him, till 2010 daily output will make 3,8 million barrels that is about 60% of today's output on the North Sea. At the same time till 2010 production rate in this region will go ahead leaving behind Iran and Norway and total one and half times more than in Brasilia.
The head of ENI supposes that in 2010 proved oil reserves of the Caspian region will be half-time more than similar reserves of the Mexico Gulf. Therefore he thinks "in this term nothing can be compared to the Caspian region".
As far as Kazakhstan is concerned, deposits of this country hold 5,4 billion barrels of proved oil reserves. Gros-Pietro named the Kazakhstan field the huge oil reservoir that can be exactly appraised only by the
International consortium Agip KCO who develops it (ENI - the project operator). In order to fully develop the "Kashagan" field, thinks the head of the Italy's concern, "we need three things: time, funds and researches". Only after that we can say of export of Kazakh oil recovered from the "Tengiz" and "Kashagan" fields: to move through the CPC pipeline (Caspian Pipeline Company) and/or by the Main export pipeline Baku-Tbilisi-Ceyhan.
At the same time Gros-Pietro told that the time would come when present oil routings are insufficient and new export routs must be sought. Saying of perspectives of moving the Kazakhstan oil via Iran's territory, according to him, "there are two politic risks", "no one will allot funds in risky projects". Today Kazakhstan produces about 800 000 barrels of oil a day. As the head of the energy and natural mines minister of Kazakhstan Vladimir Shkolnik told recently, till 2010 his country will rise its output to 2 million barrels of oil a day.
As to estimations of Wood Mackenzie for 2002, total hydrocarbon reserves of five Caspian littoral states - Azerbaijan, Iran (only reserves of the Caspian sea), Kazakhstan, Russia (only reserves of the Caspian sea) and Turkmenistan - will amount to 39.4 billion barrels (Table 1).
There are six key projects Caspian region (Kashagan, Tengiz, Karachaganak, Azeri-Chirag-Guneshli (ACG), Shah-Deniz and North Block in Russia), which hold 26.9 barrels of oil or 68% of the regional deposits. "TengizChevronOIl" JV
"LUKARCO" (JV made of LUKoil and ARCO) - 5% "KazakhOil" - 25% Mobil - 25% Chevron - 45% On 18 November 1997 during the visit of the president of Kazakhstan Nursultan Nazarbayev to the USA, in Washington Kazakhstan and 4 companies (British Gas, Texaco, Agip and LUKoil) have signed up for the production sharing agreement on the project for development the Kashagan field. In compliance with this document Kazakhstan holds 80% of the field reserves, remaining 20% - are for investors. Present day of the consortium
British Gas - 32,5% ENI-Agip - 32,5% Texaco - 20% LUKoil - 15%
It is expected that development of the Karachaganak field requests $10 billion, expected outcome - $65 billion of which $47 billion to Kazakhstan.
Shareholders of Agip KCO
Interests:
o Agip (14,29%) BP Amoco Kazakhstan Ltd. (9.5%) British Gas International (14.29%) Inpex North Caspian Sea, Ltd.(7.14%) ExxonMobil Kazakhstan(14.29%) Fillips Petroleum Kazakhstan, Ltd. (7.14%) Shell Kazakhstan exploration B. V. (14.29%) Statoil (4.8%) TotalFinaElf (14.29%) In terms of SPA, Agip KCO is the operator of the consortium of international companies. That means that Agip KCO is fully responsible for implementing Working programs approved by the Managing Committee. Shareholders are controlling over the implementation of liabilities undertaken by Agip KCO in compliance with SPA Agip KCO, and each shareholder must be legally registered in Kazakhstan and be governed by laws of the Kazakhstan Republic.
Project "Azeri", "Chirag", deepwater part "Guneshli"
Project shareholders
BP - 34,1367%
Unocal- 10,2789%
ExxonMobil - 8,0006%
Dfevon energy - 5,6262%
LUKoil - 10%
Statoil - 8,5633%
Itochu-3,92%
TPAO-6,75%
Delta Hess - 2.7213%
SOCAR - 10%
"Shah-Deniz" project
Shareholders:
BP-25,5%
Statoil-25,5%
O.I.E.C. - 10%
TotalFinaElf - 10%
LukAgip - 10%
TPAO-9%
SOCAR - 10%...
DEMULSIFIERS OF "ALKAN LTD"> BY THEIR QUALITY SURPASS ALL THE WORLD-KNOWN ANALOGUES
General director of the STS "ALKAN LTD"
Hasanov Aydin Inshalla
The head of the Nuclear Magnetic Resonance spectroscopy group of the Institute of Petrochemical Processes of the National Academy of Sciences of the Azerbaijan Republic. The founder and general director of the scientific-technological society (STS)"ALKAN LTD". Born in 1944, graduated from the chemical faculty of the Leningrad (Saint-Petersburg) State University and post-graduated from the Institute of physical chemistry (Moscow) of the Academy of Sciences of the USSR. The author and supervisor of a number of scientific developments and technologies, which have a significant industrial importance. Has more than 100 scientific works, publications, copyright certificates, monographs and patents.
The coeval of the Azerbaijan "contract of the century" on operating of the "Azeri", "Chiraq" and "Guneshli" oil-fields is the Scientific-Technological Society "ALKAN Ltd". During the period of its existence, the company had to overcome a number of difficulties of various character but it managed to become a sole manufacturer and supplier of demulsifiers - its own products - in Azerbaijan. This led to ousting of the foreign rivalry firms and let the company become a monopolist in its own country and enter the external market. For a very limited period the products of "Alkan Ltd" have turned to be acknowledged "as equal" by the world leaders in its sector of petrochemical manufacturing.Now we'd like to offer to your attention the article of the general director of "ALKAN LTD", M-r Aydin Hasanov.
"ALKAN Ltd" was established in 1994; it is a scientific-technological society, where the scientists are engaged in various fields of research works and industrial manufacture. The activity of the firm is concentrated in three directions - research works and creation of new chemical technologies, implementation into industry and manufacture of chemical substances as well as marketing and supply of products. Since the very beginning of its establishment the company has carried out lots of interesting works - state testing of our production, creation and development of large-tonnage industrial manufacture of components and reagents and at last their application by the State Oil Company of Azerbaijan Republic (SOCAR). In this field, we faced the resistance of many foreign companies, which had been working here before. That is why, notwithstanding the fact that all the preparatory works had been completed by 1994, only in 1997 the delivery of the products of "ALKAN LTD" began. Within this period a number of patents were granted, a series of articles of scientific character were published as well as monographs and a reference book.
Our reagents tested in the laboratories of our competitors in Southampton (England). Similar laboratory tests were conducted in Frankfurt (Germany). These large and serious firms are the main suppliers of the reagents for the oil-extracting industry of the former USSR, Azerbaijan included. Though one of these companies showed its interest in cooperation with us we did not share this interest. Our main condition was the creation of a joint manufacture of reagents in Azerbaijan based on existing Sumgait chemical plants and specialists of our republic. Though on the basis of "Alkan" products there had been elaborated some types of demulsifiers, soon we decided to refuse the services of that company and even became its direct competitors not only here in Azerbaijan, but also abroad.
Since 1997, six patents in this field have been granted to us. In addition to emulsion breakers, we have at our disposal one more realized interesting project - the reagents on pumping into the oil well, which have been used by SOCAR's Production Association (PA) "on offshore oil and gas extraction" for more than 2 years. We call this reagent "Alkan P - 2000", and the oil industry workers gave their own name - "Progress-2000". Within the period of this reagent application, the oil debit has been considerably raised in overwatered oil wells and in the oil wells with almost zero productivity. Thanks to this reagent, the inter-repair time was prolonged in several times. To say, if these oil wells used to stop for a cleaning and repair every 30-40 days, now they are constantly operating without any repairs for more than a year. Although our reagent has been successfully used in practice for a long time...
- Reagent ALKAN P - 2000
- Demulsifier "Alkan DE-316A"
- Demulsifier "Alkan DE-202B"
- Demulsifier "Alkan DE-318A "
- The reagent "ALKANON R-7"
AZFEN KEEPS ITS LEADING POSITION IN THE REGION
It has already been over 10 years as Azerbaijan Republic gained an independency and we all became witnesses of major changes passed through the country. Although, well-known Karabakh conflict and millions of refuges did not made growth route smooth, it is a true fact that presently our Republic is one of the most developed country in the Caspian region. Famous International Oil companies decided to make an investments into Oil and Gas sector of Azerbaijan that helped to bring Republic's production onto new standards and allowed to establish number of Joint Companies.
As a result of influence of world wide experience and international methods of work together with experienced and skilled personnel TEKFEN and SOCAR established a Joint Venture by the name of AZFEN Engineering, Construction, Installation and Manufacturing in January 1996. AZFEN JV, as a young regional company, has been very successful in adapting itself to the Azerbaijan market. Presently, AZFEN keeps both operation and business development personnel in its head office that works towards reaching the instantly transforming requirements of the Clients...
CDC - ONE OF PRINCIPAL CONTRACTORS OF EXPLORATION IN CASPIAN REGION
Shaiq Bakirov graduated from the Oil Academy in 1970 and later earned a PHD in Petroleum Engineer. He has 31 years of experience in offshore drilling, of which 6 years as Operation Manager, 16 years as General Manager, last 6 of which were as General Manager of the Azerbaijan-American Joint Venture "Caspian Drilling Company" (CDC). He is the president, as well as an executive director of the Azerbaijan Drillers Association. Has been recognized as honorary engineer by various authorities in the Oil Industry.
CDC operation
CDC was established on 16 October 1996 with the charter of two drilling rigs: "Dada Gorgud" which has been upgraded four times (1995, 1998, 2000, 2001) and "Istiglal" - formerly Shelf-5 and completely refurbished and commissioned in 1998.
From 1997 to 2001 the company drilled over 20 exploratory wells on "Azeri", "Chirag", deepwater "Guneshli", "Ashrafi", "Dan Ulduzu", "Garabakh", "Shah-Deniz", "Kur Dashi", "Araz-Deniz", "Inam", "Absheron" and "Nakhchivan". PSA s drilling a total of over 100, 000 meters. These operations played an important role in the discovery of new fields. Oil and gas content was discovered on ACG and Shah-Deniz as commercially viable. Other structures with natural resources of oil and gas content - 300 - 600 mln. barrels is a discovery for Azerbaijan as well...
"ANSHAD PETROL" OIL&GAS PRODUCTION JOINT VENTURE
Oil had been known in Neftchala since the end of XIX century. First oil pit of 10-12 depth meters hand-dug by inhabitants dates back to this time. That welcomed the beginning of exploration works and discovery of new oil fields. 1926 saw first industrial oil inflow. This effect was rapidly visible, over many years this field gave 6.0 million tones of oil.
The "Anshad Petrol" JV has been initiated by the State Oil Company of Azerbaijan (SOCAR) and Turkey's "Atilla Doüan Petrol" in 1993 on the base of former oil- and gas-related "Neftchalaneft".The contract area extended over 2500 square kilometers includes production zones Neftchala and Khilly and exploration areas Babazanan, Khashimkhaly, Nasimikend, Muganly, Orta Muganly and Shorsulu. The agreement is 20 years in duration...
"AZEUROTEL"- TODAY'S TENDENCY OF TELECOMMUNICATION MARKET
INFOCOMMUNICATION SERVICE RULES OUT FUTURE, THINKS THE HEAD OF "AZEUROTEL"
Communication rules the world we rule the communication! This has been being the slogan of the Azerbaijan-British partnership "AzEuroTel" for 7 years. "AzEuroTel" has been jointly initiated by the Ministry of Communication of Azerbaijan Republic and LUKoil Europe Ltd." (Great Britain) in 1995. During this time "AzEuroTel" become country's leading company dealing in telecommunication.
"AzEuroTel" JV has been operator of the modern digital dial exchange 92/97 based on "SYSTEM X" technology of the Britain's "GPT Ltd" (Marconi Communication). As an operator, "AzEuroTel" JV renders wide spectrum of telecommunication service: local, long-distance telephony, international traffic, multipurpose trunk NOKIA ACTIONET, wireless communication DECT, digicom with -ISDN integration, data communication. The company is one of the leading Internet-providers in Azerbaijan.
Having its SDN transport net in Baku "AzEuroTel" JV provides high-quality connections between customer's remote offices providing data transfer by the protocols X 25, Frame Relay, TCP/IP. Since September of 1998 "AzEuroTel" JV is a member of the International Telecommunication Union (ITU). Since this time the company has been conferred with 5 prestigious awards for quality, best trademark and best management. In 1999 ITU invited "AzEuroTel" to exhibit on the International Fair in Geneva with own stand. There were no representatives from the CIS area, but "AzEuroTel" and Russia's companies. Modern management, advanced telecommunication technology, best manufacturing equipment in Azerbaijan, personnel qualified and trained in Russia, Switzerland, England, Germany and Turkey these - are the main accents of company's activity in the country...
CASPIAN SUMMIT - "LACK OF OUTCOME IS ALSO OUTCOME" THE MOST OPTIMAL FORMAT IS "5-2"
Despite the parties failed to sign up the finalizing declaration as to the Caspian legal status in the first full Ashgabad summit of the Caspian littoral states, project for which has been prepared by experts, all summit participants named the summit talks as useful and expressed hope that this summit will become the first step on the way to solving the sea problem. The recent summit talks of the Caspian "five" have once again contoured positions of each state and laid dawn further course of the negotiation process to maximally make positions of parties closer in this sore
- Caspian problem
The presidents agreed on holding regular annual meetings on the principles of rotation in each Caspian littoral state. Next country- summit home is expected to be Teheran. The president Saparmurad Niyazov reported to journalists that finalizing summit declaration prepared by experts "stipulates nothing" and "this document is not specific and idle". He also noted that the parties came to common opinion as to the principles of parting the Caspian sea. "They propose some modified line which does not exist in existence". But Turkmenistan supposes to draw 5-mile coastal line plus 25 miles of economic zone", told the president adding "there must not be a common sea". Niyazov reminded Ashgabad's position - no country shall operate on the disputed sectors of the Caspian Sea before the status is finalized. If littoral states are not able to solve this problem they have to apply to the International Court. He also told that Russia "has no clear attitude in this Caspian issue", though as it is known Moscow for a long time proposes "to part the sea-bed and have the water is in common use". Unlike to its previous speech made on the first day of the summit when S. Niyazov had told that "Caspian sea means a blood" and that his country had "enough forces to defend its interests on the Caspian", his last speech on the meeting had a peaceful nature: disputed issues shall be solved by negotiations and Azerbaijan is Turkmenistan's brother. On the summit the president of Islamic Republic Iran reaffirmed Iran's attitude: "Caspian status must base on agreements of 1921 and 1940 that stipulate common use of its resources". Agreement, according to Iran, must base on consensus and any unilateral actions are inadmissible. He offered to refrain from any operations on 20% portions of the Caspian which according to him are Iran's minimal stake. The president of Iran Mohammed Hatami thinks that no party had expected for finalizing this matter in one day. According to him, they are willing to solve this matter but by common consent of all presidents and hold regular meetings in the future. Therefore, Hatami thinks that the present summit was a "great success".
According to the president of Russia Vladimir Putin, "in the course of dialogue with the president Heydar Aliyev the heads of Russia, Kazakhstan, Turkmenistan, Azerbaijan and Iran agreed to continue consultants as to the Caspian problem". According to him, leaders of five littoral states expressed determination to seek in the future the agreement concerned with the Caspian status. He noted that this is first time when heads of littoral states had such detailed discussion of this sore Caspian problem and all matters, including disputed, can be efficiency resolved by bilateral as well as multilateral talks. "That is the base of the summit", told the president of Russia. According to Heydar Aliyev there is "nothing to add" to the words of the Russian president and he is fully agree with him.According to the president of Azerbaijan Heydar Aliyev, lack of legal status can not be a reason for sustaining operations on the Caspian sea in the already formalized national sectors.
As far as Kazakhstan is concerned, the president of this country told that among the Caspian littoral states his country was one of those mostly supporting the principle of median line parting the Caspian sea.So, the main result of the summit is that no party told that search of consensus by negotiations was non-efficient and the progress of this matter directly depends on change of strict and little-room compromise stands of Iran and Turkmenistan. This has already brought the evident result - trilateral meeting of Russia, Azerbaijan and Kazakhstan - has already been planned for May. This meeting is aimed at signing the agreement for drawing the line on the Caspian between these states, reported to Interfax in Ashgabad Viktor Kolujny, the special envoy of the president of the Russian Federation in the Caspian region, the deputy foreign minister. Moscow and Baku had opportunity to fulfill all agreements signed between them, the Azerbaijani leader ended the bilateral talks with the president of Russia Vladimir Putin in Ashgabad after the Caspian summit has been ended. "Relations between Russia and Azerbaijan are intensively developing in right direction, in Azerbaijan everybody happy with it," told H. Aliyev. Saying of summit outcomes of Caspian littoral states in Ashgabad, the president of Azerbaijan told that this was a good opportunity to discuss existing problems. According to Aliyev, leaders of Caspian littoral states need regular meetings...
- Anticipated summit outcomes
- Caspian - world's largest lake
- International law
- History and alternatives
- UNCLOS for the Caspian sea
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