Azerbaijan, Baku, May 7 / Trend M. Aliyev, E. Ismayilov /
A foreign contractor will pay $2 million to the state within 30 days from the date when the contract for exploration, rehabilitation, development and production sharing of the Balakhani-Sabunchi-Ramani and Kurdakhani fields enters in force, Vice-Speaker of the Azerbaijani Parliament Valeh Alasgarov said.
He said that after achieving the average volume of oil production within 90 days exceeding the average production volumes in 2009 in the contract area by 1.5 times, the foreign company will pay bonus worth $2 million to the state within 30 days.
It was stressed that a foreign contractor will sell oil to SOCAR in accordance with the following volumes annually during four years.
A foreign contractor to sell SOCAR 42,700 tons for the first year, 42,200 tons for the second year, 41,800 tons for the third year and 41,400 tons for the fourth year.
The oil will be sold to SOCAR at the oil price on the local market. It is several times cheaper than the oil price on the world market.
Associated gas, produced in the fields, will be delivered to SOCAR free of charge, Alasgarov said.
The Azerbaijani Parliament ratified the contract for exploration, rehabilitation, development and production sharing on the block of Balakhani-Sabunchi-Ramani and Kurdakhani fields on Friday.
SOCAR and UGE-Lanser PTI company signed a contract for the rehabilitation, development and production section (PSA) on onshore block of fields Balakhani-Sabunchu-Ramani and Kurdahani in June. The contract covers an area of 16.14 square kilometers.
The contract was signed for 25 years, with a possible extension for another five years. Lanser got about 75 percent of equity participation in the contract and SOCAR -25 percent.
Income from profit oil will be calculated by the formula R-factor. Azerbaijan's share will initially hit 55 percent of revenue, with growth up to 92.5 percent, SOCAR head Rovnag Abdullayev said earlier.
Investment in the project can reach several hundred million dollars. It will be sufficient for reconstruction of the field and stabilization of oil production.
The fields Balakhani-Sabunchu-Ramani have been developed since 1871. So far, about 9,549 wells have been drilled and 271 million tons of oil have been produced. Remaining recoverable oil reserves estimated at 7.3 million tons. About 208.200 tons of oil was produced in 2009. Now, the block of fields is on the balance of Balakhani Oil and Gas Production Department. The operating fund has 1,124 wells. About 328 wells are not exploited.
Exploration work was carried out on the field Kurdahani from 1914 to 1947. Since the beginning of field development up to January 1, 2010, about 59 wells have been drilled and 198,000 tons of oil have been produced. Remaining recoverable reserves hit 205,000 tons.
