Azerbaijan Oil Contracts

Azeri, Chirag and Gunashli

David Woodward, President (as of January 1, 1999)

Azerbaijan International Operating Company (AIOC), a consortium of 10 major international oil companies and SOCAR, is developing the Azeri, Chirag and deep-water portion of Gunashli fields in the Azerbaijan sector of the Caspian Sea. Their 30-year Production Sharing Agreement (PSA) was signed on September 20, 1994, ratified by Parliament on December 2, 1994, and went into effect on December 12, 1994. The contract area has estimated reservs of more than 4 billion barrels of oil.

During the past 3.5 years, the company has succeeded in achieving the world's best safety record in delivering a fast track, world-scale project. The company began oil production from its newly refurbished Chirag-1 platform on November 7, 1997, an event which was officially celebrated by the Azerbaijan government on November 12, 1998, with a number of high-ranking foreign government, state officials and delegations participating.

Map: Click to enlarge

The main part of the Early Oil Project has been concluded which included the refurbishment of the Chirag-1 platform, the construction of a new onshore terminal at Sangachal and a 230 km subsea pipeline system, and the rehabilitation of two existing export pipelines to transport Early Oil to the Black Sea north through Russia to Novorossiysk and west through Georgia to Supsa. The Russian route has been operational since last year and the first tanker lifted 80,000 tons of AIOC-produced oil on March 24, 1998. AIOC plans to lift 2-3 tankers per month for the remaining months of 1998 to total 1.5 million tons this year. Meanwhile, the second Early Oil Export Pipeline (via Georgia) is still under refurbishment, and work continues on selecting the ultimate Main Export Pipeline.

Participating companies include: BP, Unocal, LUKoil, Statoil, ExxonMobil, Pennzoil, ITOCHU, TPAO, Delta Hess and SOCAR

AIOC
Villa Petrolea, 2 Neftchilar Prospect (Bayil), Baku
Tel: (994-12) 97-90-00, 97-97-54
Fax: 97-96-02, 97-97-37
bayatltf@bp.com
www.baku.bpweb.bp.com


From Azerbaijan International (6.2) Summer 1998.
© Azerbaijan International 1998. All rights reserved.

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