Baku, Azerbaijan, May 23
By Maksim Tsurkov - Trend:
The cost price of oil production on the major Muradkhanli-Jafarli-Zardab block in Azerbaijan, operated by Canadian Zenith Energy, will be lower starting from 2019, a source in the country's oil and gas market told Trend on May 23.
Today, the cost price of oil production on the block is around $19 per barrel.
"The program on restoration of deposits will lead to an increase in production and, accordingly, a reduction in the cost. Zenith has a clear goal - to achieve a daily production rate of 1,000 barrels before the end of 2018. According to forecasts, upon achieving this goal, the production cost on the block will be $13 per barrel, which can occur as early as next year, "the source said.
Presently, the average daily production is about 300 barrels of oil.
Azerbaijan’s state oil company SOCAR and Zenith Aran Oil Company signed a REDPSA in March 2016 for a block that includes the Muradkhanli, Jafarli and Zardab oilfields. These fields cover an area of 642.2 square kilometers. Production under the agreement began in August of 2016.
Zenith holds an 80-percent participating interest in the three fields within the contract area, while SOCAR retains the remaining 20 percent. The duration of the agreement is 25 years, with a potential extension by five years.
The total area of Muradkhanli-Jafarli-Zardab Block is 642.2 square kilometers, and under the contract it is divided into rehabilitation and exploration territory.
The Muradkhanli field, which is included in the contract area, was discovered in 1971, Jafarli in 1984 and Zardab in 1981.
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