SOCAR, Statoil may ink agreement on Karabakh field in 2018

  19 February 2018    Read: 1984
SOCAR, Statoil may ink agreement on Karabakh field in 2018
Azerbaijan’s state oil company SOCAR and Norway’s Statoil may sign an agreement on the Karabakh offshore oil and gas field’s development this year, Vitaly Baylarbayov, SOCAR deputy vice president, said in an interview with Reuters.

Baylarbayov said the Southern Gas Corridor (SGC) could be expanded if promising new gas fields in Azerbaijan can be developed.

He mentioned the Absheron gas field, where SOCAR is drilling in partnership with French oil company Total, and the Karabakh field which it is due to explore with Norway’s Statoil.

Azerbaijan’s Umid and Babek fields could also be developed as could the next stage of Shah Deniz, he said.

“Many foreign companies are also expressing interest in development of Umid and Babek fields together with SOCAR and we are in talks with them,” he said without elaborating on details of talks.

The first phase of the SGC pipeline from Azerbaijan to Europe will open in July and could be expanded after it becomes fully operational in 2020, Baylarbayov added.

“We will start first commercial supplies of gas to Turkey (through the Trans-Anatolian Natural Gas Pipeline, TANAP) in early July this year,” he said. “We can say now that the (SGC) pipeline will be put into operation on time, in 2020.”

Baylarbayov added that the Southern Gas Corridor CJSC would continue to seek funds for the project. In December 2017, SOCAR and Statoil signed two contracts on main principles of cooperation.

The first contract covers issues of exploration, development and main commercial principles and provisions of the PSA (production sharing agreement) on some promising structures in the Azerbaijani sector of the Caspian Sea, while the second contract covers main commercial principles and provisions of the Risk Service Contract (RSC) regarding the Karabakh field.

The Karabakh field was discovered in 2000. Its initial oil reserves amount to 100 million tons. SOCAR operates Karabakh field’s development.

The Southern Gas Corridor, worth $41.5 billion, is considered as one of the priority energy projects for the EU, which strives for diversification of gas sources. The project envisages the transportation of gas from the Caspian region to the European countries through Georgia and Turkey.

At an initial stage, the gas to be produced in the Stage 2 of development of Azerbaijan's Shah Deniz field is considered as the main source for the Southern Gas Corridor projects. Other sources can also connect to this project at a later stage.

As part of the Shah Deniz Stage 2, the gas will be exported to Turkey and European markets by expanding the South Caucasus Pipeline and the construction of TANAP and Trans Adriatic Pipeline (TAP).

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