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The beginning of oil production on the coast of the Caspian Sea dates back to the 16th cen-tury. Since then an interest in oil production from fields off the Caspian coast has always had and having a priority in development of productive forces and infrastructure of industry. The Absheron region threshold is a huge potential source of hydrocarbon resources for the Azerbaijan Republic. Estimated recover-able reserves of undeveloped deepwater fields - Guneshli, Azeri and Kyapaz - exceed 500 mil-lion tons of oil and contain about 125 billion cubic meters of natural gas. The development of offshore oil and gas fields at the beginning and mid of the 20th century was not easy.
However, countless solutions by domestic scientists and engineers to the ever-increasing challenges of finding and producing oil and gas in Caspian fields offshore Azerbaijan enabled in 1949 to discover legendary Neft Dashlary (Oil Rocks). The tapping and developing of Neft Dashlary played a great role in the development of the Azerbaijan upstream oil industry. New richest adjacent fields such as Gum Adasy, Bakhar, Duvanny, Bulla Deniz, Sangachaly-more and Guneshli. Guneshli, which of develop-ment on large scale was begun in April 1980, is highlighted among other fields discovered. Over the past period, 12 deepwater platforms were installed, over 160 production and injection wells were drilled, hundreds of kilometers of underwa-ter oil and gas pipelines were laid, a variety of engineering facilities were built to construct the fields. From 1986 the field has been developed with application of water injections. At the moment, the current recovery is 0.29, a factor of using initial recoverable reserves is 0.63 and a rate of recovery of recoverable reserves is 25.5 percent.
Experience of using old Caspian fields off-shore Azerbaijan showed that a wide application of secondary recovery and a more condensed net of well distribution over a field allows to reach more higher performance. From this point of view, special attention is focused on introduc-tion of innovative methods and forms of redevel-opment of the Guneshli field. A scientifically founded approach to oil and gas production enabled to halt a slowdown in the pace of oil production and reach a plateau output of 101,000 bpd in the Guneshli field.
As it is known, offshore oil production by the Production Association covers mainly old fields which are being developed by outmoded tech-nologies dating from the 60s and designed for onshore oilfields and currently adapted to off-shore conditions. What 60 percent of oilfield and drilling equipment exceeded their a life service makes cost-effectiveness of the field more chal-lenging. In addition, a part of the total number of wells is at a standstill because of offshore facili-ties being not fit for upstream operations. It is widely acknowledged that operating in Soviet times was very difficult and can be very frustrat-ing. The period of the centralized economy man-agement system furthered depletion of produc-tive horizons and a sharp fall in reservoir pres-sure. Rehabilitation of productive wells was lacking completely. From this point of view, we think attracting foreign investments to the upstream oil and gas industry is of special value.
The offshore upstream oil and gas industry is closely related to other sectors, including the downstream oil and gas industry, petrochemi-cals manufacture, power generation, transport ans other sectors. It is therefore commercially viable at the same time to put up the foreign investments for the sectors closely related to fuel and energy complex and power generation to intensify their development. Commercial via-bility of intensifying oil and gas production off-shore Azerbaijan set the production associa-tion's staff a task to radically reconsider the chal-lenges of development and use of old fields. It will open a whole epoch in development of the upstream oil industry.
Production, inactive and disused wells were subjected to technical test, geological survey and scientific research. As a result, since 1997 plateau output has been reached and in 1999 a significant growth was achieved in depleted fields of the Absheronneft and Gum Adasy Oil and Gas Resources Producing Directory. Geological and technical actions, application of secondary and tertiary recoveries, regulation of an oil flow to buttonhole, application of acoustic and other physico-chemical methods of affect-ing a reservoir, re-entering inactive wells and the wells that are at a standstill for various reasons. So, the indicated operations allow the Association to decide the set tasks in oil and gas production and even to surpass the production targets. The Association focuses on rehabilita-tion on oil and gas production in old fields -Zykh, Govsany, Neft Dashlary, Pirallahi and Gryazevaya Sopka (Mud Hill). A thorough study of data on oil production over blocks and hori-zons showed that in the Neft Dashlary field there were sufficient recoverable oil fields. To redevel-op the field, a rehabilitation program for the Neft
Dashlary field was worked out in conjunction with MAI Consultancy Ltd (UK).
Under the program, it is provided to drill more than 300 production and injection wells. An agreement on feasibility study of joint devel-opment and use of the Zykh and Govsany fields with LUKOIL and Gipromorneft (the State Research and Designing Institute for develop-ment of offshore oil and gas fields) was signed. A joint work together with foreign companies on rehabilitation of oil fields under development will continue in the future.
The most important problem of offshore oil and gas production is to satisfy the country's needs for gas and to supply technological processes with natural and casinghead gas. The discovery of the Shah-deniz field containing about 1 trillion of gas set the Association a task to build a new plant processing natural gas. Analyze of offshore oil and gas upstream opera-tions shows that the set tasks could be solved if only the latest achievements of engineering and science are used. For this purpose, the ways of solving many problems pertaining offshore oil and gas production are under discussion by specialists from the Association and scientists from more than 40 research institutes, universi-ties, scientific centers of the Academy of the Sciences and others. After the work has been done, in the Production Association a compre-hensive program was developed - Scientific and Technical Measures of the 2000-2001 years.
The period was called a year of application of scientific results in offshore oil production. A main feature of developing offshore oil and gas fields is that all the works related to organization of hydrocarbons production are carried out in the aqueous medium. Our Association started its activities in 1963 at a time when Glavmorneft Head Office was founded, on the ground of which today's production association for off-shore oil and gas production was then estab-lished.
The foundation of the world's first town, Neft Dashalary, off the sea coast on piles is the most landmark in the history of the existence of our production association.