Oil & Gas News

President approves fresh SOCAR charter, structure
President Heydar Aliyev issued a decree on January 24 to approve the Charter and Structure of the State Oil Company of the Azerbaijani Republic (SOCAR).
Under the decree, the onshore and offshore oil and gas production unions of SOCAR will be combined into the Azneft production union, while the marketing and economic operations department will be set up on the basis of the merger of the foreign economic relations department and the Azarnefttachizat union of SOCAR. The trunk oil pipelines production union will be grown into the oil pipelines department and Selflayihatikinti production union transformed into the Baku deep foundations plant. In accordance with the decree, the Azarneftyag and Azarneftyanacag oil refineries are to be established on the basis of the Azarneftyag and Azarneftyanacag production unions respectively.
Besides, SOCAR enterprises the Xazardanizgazmatikinti trust, the Xazardanizneftsosialtikinti trust and the Avtonaqliyyat office are to be privatized, as per the decree.
The company's management and administration will form the basis for the management structure of SOCAR. The management is to consist of SOCAR president, first vice-president and two vice-presidents, in compliance with the decree.

Reports on Chinese company acquiring stake in Gobustan oil project floating
According to a report carried by the Chinese bureau of the Russian Interfax news agency, Hong Kong-listed red chip CNPC announced that it would buy a 31.41-per cent stake in Commonwealth Gobustan Ltd. (CGL), a Canadian company holding an 80-per cent interest in Azerbaijan's Gobustan Concession oil contract, and assume its existing debts, for a total of US 10.5m. CNPC did not specify how it would fund the acquisition. Caihua Wang, the official website of the Hong Kong Stock Exchange, reported that the company was likely to seek outside funds to pay for the acquisition. CGL, owned by the Commonwealth Oil & Gas Co. Ltd., a subsidiary of Vancouver-listed A&B Geoscience Corp, signed the PSA (Production Sharing Agreement) on the Southwest Gobustan Concession oil project with Union Texas and the state oil company of Azerbaijan, SOCAR in 1998. SOCAR holds the remaining 20-per cent interest. Gobustan, along the Caspian Sea, is composed of three blocks, extending approximately 150,000 acres, and is known for containing oil that is low in corrosive chemical compounds. As the first onshore redevelopment project signed in Azerbaijan, the blocks are expected to produce 20,000 barrels of oil and 100m cu ft of gas daily by 2004. The net assets of CGL as at September 2002 were USD 3.57m. Approached by AssA-Irada to comment on the report, the CNPC Baku Office neither denied, nor confirmed it.

Oil, gas summit due in London
The third international oil and gas summit of CIS countries will be held in London to last from March 31 to April 2, according to the Ministry of Fuel and Energy of Azerbaijan. The summit is to mull issues on exporting hydrocarbon resources of CIS countries, prospects of developing production industry, legislation of CIS nations in this field, etc. CIS governmental officials and private sector representatives will take part in the forum.

Latest consignment of Azeri oil loaded at Novorossiysk
The latest consignment of Azeri oil was loaded into a tanker at the Russian port of Novorossiysk on Tuesday evening, according to SOCAR.
The winner of the first tender of the year to load a tanker with Azerbaijani oil was Swiss company Vitol. This company will supply 140,000 tons of oil.
It is planned to hold a second tender early in February, SOCAR has said.
Reportedly, it is envisioned to export 2.5 million tons of oil via the northern route to Novorossiysk in 2003.

LUKOIL to sign contract with Iran
LUKOIL is planning to sign a long-term contract with the National Iranian Oil Co, according to Russian media reports. The Litasco company, which sells LUKOIL crude and oil products, said the contract would be signed in March. LUKOIL sent its first batch of oil - 30,000 metric tons to Iran via the Caspian Sea in November. It now exports 100,000 metric tons a month to Iran's northern refineries. This is a new export route for Russian oil, Litasco added. Crude from LUKOIL subsidiary Nizhnevolzhskneft will be shipped from ports of Astrakhan and Volgograd. Reportedly, Iran has limited market potential for Russia because Russian oil companies compete with oil from Kazakhstan and Turkmenistan.