Azerbaijan International

    Azerbaijan Oil Contracts

    James A. TilleyKarabakh Prospect
    No longer in operation after February 23, 1999.

    James A. Tilley, President

    CIPCO announced on January 21, 1999 that they intend to cease operation on February 23, 1999. "We found gas, we found oil and we found gas condensate -- but we didn't find enough of it," CIPCO President James Tilley said. "There was quite a gap between what we found and what would be commercial, We needed roughly to find twice as much."


    CIPCO had invested some 100 million dollars (86 million euros) to drill three exploration wells in the Karabakh off-shore oil structure, located some 100 kilometers (62 miles) northeast of Baku, but discovered mostly gas. This was the second international contract signed. It is the first one to stop operations.The consortium had thought the structure contained six to seven million tons of recoverable oil reserves, 20-21 million tons of total reserves and 23 billion cubic meters of gas.



    Signed November 10, 1995
    Ratified February 13, 1996


    Map: Click to enlarge

    The Caspian International Petroleum Company (CIPCO) is the joint operating company formed to explore and develop the Karabakh Prospect which is located about 125 kilometers east of Baku in the Azerbaijan sector of the Caspian Sea. The contractor parties in CIPCO are LUKoil (12.5%), Agip (5%), the joint-venture company LUKAgip (45%), Pennzoil (30%) and SOCAR (7.5%).

    CIPCO's day-to-day operations were conducted by a management team which reported to a committee of shareholder representatives. Positions rotated between the shareholder companies every three years.

    The first exploration well (KPS-1), drilled to a depth of 3,840 meters, revealed a gas accumulation, the extent of which was evaluated in the second and third wells. The second well (KPS-2), begun in April 1998, is located 5.5 kilometers northwest of the first well and was drilled to a depth of approximately 4,000 meters.

    Drilling was carried out by the Caspian Drilling Company (CDC) on their semi-submersible rig, Dada Gorgud. The drilling process, including testing,


    CIPCO
    Old Intourist Hotel
    63 Neftchilar Prospect, Baku
    Tel: (99-412) 92-40-27
    Fax: 92-40-07


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

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