PSA ON GARACHUKHUR FIELD SIGNED IN AZERBAIJAN

Baku, IAA "Trend" June 18 corr. P.Kesamanski

The PSA on rehabilitation and exploitation of the Garachukhur onshore field was signed on Friday. The document was undersigned by Natig Aliyev, President of the State Oil Company of Azerbaijan (SOCAR) and La Min Gue, President of Shengli Oil, head of Noble Sky, in presence of Yagub Eyyubov, Azerbaijani First Vice Premier.

Aliyev said that the contract comes as the 23rd PSA in Azerbaijan signed with foreign oil companies. The participation share was distributed as 75% and 25% between the alliance and SOCAR. Noble Sky is a joint company between Shengli Oil of China and Middle East Petrol of the United Arab Emirates.

The SOCAR President noted the intensive talks on the field had been held since the beginning of the year. Oil production from the Garachukhur field with the estimated reserves of 41.9 million tons of oil was set up in 1928 and 36.2 million tons has been lifted thus far. The residual reserves of the field are estimated at 5.645 million tons. There are 121 wells on the field and 45 of them are exploited. Monthly production from the field makes up 16,000 tons.

Under the terms of agreement a foreign contractor is committed to increase oil production by 1.5 times within 3 years as compared to 2003. In the contrary SOCAR has a right to break the contract. The term of the agreement is 25 years with possible prolongation for 5 years. Bonus of Noble Sky of Azerbaijan will comprise $1m, while the investments are to make up $220m.