| |
|
Mr. Agostinelli, what are the plans of Agip concerning exploration performance in Kur Dashi, Araz Deniz Contract Block?
As you know, the contract on Kur Dashi was signed on the 2nd June 1998 and came into force on the 30th July of the same year. The project’s operator is Agip, our partners in the present contract are Mitsui (Japan), TPAO (Turkey), Repsol (Spain) and SOCAR companies. From December 1998 until April of 1999 Caspian Geophysical JV conducted a 3D seismic survey, which showed the presence of elements of interest in the contact area. The question is whether the volume of possible reserves will be commercial, and only the exploration drilling will show it.
Following the previously carried out studies by the results of seismic survey data interpretation we chose a drilling location and in September 1999 we received from our shareholders a confirmation to drill a new wildcat in Araz Deniz structure included in the contract block. For this we reached an agreement with BP-Amoco on utilization of the semi-submersible drilling rig Istiglal - the rig shifts to Agip after the second well drilling in Shah-Deniz.
Today it’s very critical for us that Agip is the first company operating in the Azerbaijan sector of the Caspian Sea, which will transport synthetic base drilling cuttings to shore: up to date such cuttings were discharged into the sea by other operators. The wastes will be treated and disposed on shore. For that it’s necessary to create the required infrastructure: we are resolving today these tasks in close contact with the Azerbaijan State Committee on Ecology.
Agip will begin drilling operations probably between the end of December 1999 and early year 2000, i.e. just in one year and a half after signing of the contract, having left behind other companies. And we are proud of this achievement.
So, Agip can become the second company after AIOC, that will obtain oil in the Azerbaijan sector of the Caspian Sea?
Rapid rates of operations testify that we are seeking for success, and, certainly, the drilling itself and time will show results.
We are starting to drill in the southern part of the Caspian and results of these operations will allow to collect geological information which will also be important for other operators in the same area.
Did the failure in Karabah have an influence on Agip plans in Azerbaijan and in the Caspian on the whole?
What happened in Karabakh is just business as usual for an oil company. The fact that this did not have any big impact on our plans in the area is testified by our current activities. We have expanded our presence in Azerbaijan. We are continuing to study, evaluate new opportunities in Azerbaijan. I cannot exclude that in the future Agip will apply to SOCAR with new proposals of cooperation.
Our activity in the Caspian applies to Kazakhstan as well. Agip participates in the development project for the very large gas and condensate field of Karachaganak and also is one of shareholders of the OKIOC consortium that is engaged in exploration and development of the Kazakhstan shelf of the Caspian. There are large opportunities there for investment into oil and gas producing projects.
For the present time we are not operating in Turkmenistan, but our plans could change in any time.
What are Agip plans on participation in the project of the main export pipeline (MEP) of Azerbaijan with the consequent connection to the future pipeline of the Kazakhstan oil exporters?
In Kazakhstan we participate in the Caspian Pipeline Consortium (CPC), in future the Karachaganak field will be connected to this oil pipeline. Time will show through which pipeline any oil possibly found in the OKIOC area will be exported. If this consortium finds large reserves, it means that construction of a big export pipeline will be necessary.
Since OKIOC has just started to drill the first wildcat well and presence of commercial reserves are not yet proven, it is also too early to speak about export of this oil. We will know only later how attractive it will be to export it through this or that pipeline.
Concerning Azerbaijan, the situation is analogous: we haven’t oil here to export yet, so today we are not involved directly into the negotiation process on the Main Export Pipeline which, anyway, we follow with interest. If drilling of the new wildcat in Kur Dashi, Araz Deniz block shows presence of oil reserves, we’ll start analyzing the situation concerning pipelines.
What is your attitude to the possibility of construction of the Export Pipeline towards the south, i.e. to Iran?
Only after a possible discovery of commercial reserves in Kur Dashi we will then evaluate the situation and the various available options for export. Commercial parametres will have to be evaluated as well as the feasibility of the various options. Any final decision naturally will have to be taken with the agreement of the Azerbaijan Government.
Is the uncertainty of the Caspian’s legal status an obstacle for Agip operations?
The legal solution of the Caspian Sea’s status is an issue to be resolved by common agreement of the Caspian littoral states and we can’t interfere in this process. We can observe attentively which agreements are reached on this issue. The only thing we can ask is that, whatever decision on the legal status of the Caspian Sea is reached, the investments made by the various oil companies in the area must be safeguarded.
Azerbaijan is a country where it is to do business. When I say that it’s possible it means that contracts are respected in this country and are a reliable instrument for our business operations.
There is also a right attitude to solve problems by negotiation between the parties. The oil industry makes huge investments at the beginning of its operations, which are only recovered after so many years: that is why the stability of commercial conditions observed in Azerbaijan is very important to us.
The dimension of investments that a company is willing to make also depends directly on the perceived stability of commercial conditions in that country. Today this stability is observed in Azerbaijan: this is a merit that must be given to the Government of this country.
This is demonstrated by the presence in Azerbaijan of almost all the large oil companies.
I must also say that I enjoy my assignment in Azerbaijan and I look forward to some more years of work in this beautiful country.