Oil & Gas News

Istiglal sails away to work on Shah Deniz
The Shah Deniz partners announced that on Monday the "Istiglal" semi-submersible drilling rig sailed to start the Stage1 Development pre-drilling programme in the Shah Deniz gas and condensate field area.  This follows the major decision taken by the partners late February to sanction the Stage 1 project.
Earlier the "Aura", a Tidewater Marine International Inc. vessel, under contract to BP Exploration (Caspian Sea) Ltd., towed the flotation cradle with a drilling template to the "Istiglal" drilling rig. The template, which was installed under the "Istiglal" two weeks ago, will be used for the pre-drilling of production wells.
The Stage 1 pre-drilling progamme includes the drilling of three production wells. These operations are planned to commence early April and will continue for 18-20 months.
The template was designed by UWG, a UK company based in southern England. Fabrication work was carried out by Azfen/Tekfen in their construction yard near Baku. The contractor used 100% local content which included some 25,000 manhours of labour employing some 30 local Azerbaijan citizens. The fabrication of the template, which is a 41-tonne piece of equipment with 15 well slots, commenced in September last year and was completed on schedule at the end of January. All this work was accomplished with a high degree of safety performance.
Rob Kelly, Shah Deniz President, said: "This is a significant milestone toward commencement of Shah Deniz offshore activities. Pre-drilling of these wells will allow us to start production immediately after the installation of the TPG-500 platform to meet our target of delivery of first gas to the market before winter 2006."
The parties to the Shah Deniz Production Sharing Agreement (PSA) are: BP (operator - 25,5%), Statoil (25,5%), the State Oil Company of Azerbaijan Republic (Socar - 10%), LUKAgip(10%), NICO (10%), TotalFinaElf (10%), and TPAO (9%).
Shah Deniz milestones:
·Major contracts award 1Q 2003
·First pre-drill well spudded April  2003
·Platform construction starts 2Q 2003
·Terminal construction starts 4Q 2003
·South Caucasus Pipeline construction starts 2Q 2004
·First gas delivery to Turkey 3Q 2006

IMF prepared to finance BTC
"If more funds are required for the Baku-Tbilis-Ceyhan (BTC) project, the International Monetary Fund (IMF) can reach a consensus on the issue with the government," head of the IMF mission and deputy chief of the IMF European II Department John Wakeman-Linn has told journalists. According to him, the IMF is not opposed to the BTC project and has always supported it. The IMF has objected only to the financing of the BTC through the State Oil Fund and suggested that funds be allocated from the state budget.

EBRD to fund Azeri stake in Sah-Daniz
In his interview with ANS TV, SOCAR President Natiq Aliyev has said the European Bank of Reconstruction and Development (EBRD) Credit Department ruled in favour of financing Azerbaijan's 10-per-cent stake of $320m in the first stage of the Sah-Daniz gas project. It is not expected to fund the next stages of the project through financial allocations from either the State Oil Fund or the state budget.
Previously, the EBRD had agreed to fund $250m of the Azerbaijani stake in the project. In the wake of Natiq Aliyev's London negotiations with EBRD officials last week, such an agreement was reached.

SOCAR completes 18th well in Gunasli
The State Oil Company of Azerbaijan (SOCAR) has completed drilling operations on exploitation well #18 at a depth of 3750-m in the Gunasli field. SOCAR said the well is expected to give 400 tons of oil per day.
The Gunasli field was put into operation in 1994. Currently, the daily production rate in 17 exploitation wells is 3750 tons.

Iran opens 'blue stream' to Naxcivan
Supplies of natural gas from Iran to the Naxcivan Autonomous Republic are to start from March 20 on. In accordance with the preliminary agreement reached with the Iranian side, in the first 5-year stage the blockade-torn enclave will be provided annually with 25m cu m of gas. Later on, the volume of supplies will be expanded gradually to 350m cu m of gas per year.
Naxcivan got the 'green light' to import natural gas from Iran after an official visit to the Islamic Republic by Azerbaijani president Heydar Aliyev last year.

4,000 deals brokered with land owners
Talks with the owners of land along the Baku-Tbilisi-Ceyhan (BTC) pipeline are nearing completion. Roger Nann, a BP Azerbaijan Vice-President, said during his meeting with the media that about 4,000 contracts had been concluded with land owners in 13 rural districts the Azeri leg of the conduit is to pass through.
Ongoing talks with the remaining 600 land owners are to be completed by the end of March, whereupon tax-exempt compensation payments are due from April, coinciding with the launch of  pipelaying work. BTC-affected communities will be encouraged to contribute to the pipeline construction.
Iraqi crisis increases Azerbaijan's budgetary incomes.
The Iraqi crisis has pushed world oil prices up to $36 per barrel. The SOCAR foreign relations department has informed AssA-Irada that currently Azerbaijani oil is being sold at $35.87 per barrel. The 2003 state budget estimated crude at $19.5 per barrel. As the rise in oil prices continues in this way, Azerbaijan's incomes from oil sales will increase by tens of millions of dollar a year.