Winter 1995 (3.4)
for a Sunnier Future
by Mike Sparks
The Azeri translation of "Gunashli" means "sunny" and this offshore field which is 100% operated by SOCAR is as important to the Azerbaijani economy as the sun is to the people. Readers of this journal will already be aware that the undeveloped deep water part of the offshore Gunashli field forms part of AIOC's unitized development along with the Chirag and Azeri fields. Less well publicized, however, is the existing producing portion of Gunashli which lies in 80/120 meter water depths as compared to the undeveloped deep water Gunashli at 300 meters. Current production from Gunashli is about 120,000 barrels or 16,000 tons per day. This production is vital to Azerbaijan's economy as it comprises 60% of the total production from all sources, both on and offshore.
Unfortunately, production has been falling steadily at a rate of 9% a year for quite some time. The reasons are well understood and SOCAR's technical experts have worked out recovery plans. As usual, the problem is mainly lack of finances to maintain the required drilling program and to keep the topside production equipment up to the required standard. SOCAR have selected the Norwegian / British engineering company Kvaerner to provide project management services to SOCAR to rehabilitate Gunashli. The work is funded by a $20.8 million World Bank loan for "Petroleum Technical Assistance", part of which relates to Gunashli.
Gunashli is located 120 km east of Baku and 12 km to the southeast of the Oily Rocks (Neft Dashlari) field. It was seismically explored from 1958 to 1963. Further appraisal and drilling continued to reveal a reservoir 12 km by 4 km. The first offshore fixed platform was in place by 1976. It consisted of four jackets with the intention of drilling 10 wells. In 1980, the oil produced from one well was 320 tons per day. Presently there are 12 platforms with approximately 130 oil producing wells. In addition, there are several jackets already fabricated but not yet installed which can be seen at the SPS (Shelfprojectstroy) jacket fabrication yard at Qaradagh, south of Baku.
The large number of platforms at Gunashli is typical of Caspian developments to date which use conventional, essentially vertical, drilling rather than a mixture of vertical and deviated forms which is now standard. Oil is transported through a subsea pipeline to Oily Rocks where associated gas is separated and transmitted through a subsea pipeline to Oily Rocks where associated gas is separated and transmitted to Qaradagh in the SOCAR Gas Compression Plant constructed by Pennzoil in 1992. The crude oil is routed from Oily Rocks to the Dubandi Oil Terminal on the Absheron Peninsula. It is likely that a connection will be channeled into the "early oil" export pipeline system. It is believed that commercial reserves remaining in Gunashli are more than 100 million tons and the quality of the oil is excellent.
A project team has been formed under the direction of Kvaerner's Project Manager, Rolv Jesje, and SOCAR Project Director, Nazim Aliyev. Project mobilization commenced in October of this year and full activity began at the end of November. The development plan is in three phases, Project Preplanning, Project Preparation and Project Implementation. The total project duration is expected to take 40 months and finance needs to be secured for costs could be as high as $500 million. The goal is to double current production rates. An early priority is to establish the viability of this project before engaging in detailed financing discussions. This ambitious project is SOCAR led, but they have an open mind toward outside participation. Interest is already being shown by some major foreign oil companies. The existing Gunashli field has a distinguished history of contributing to Azerbaijan's economy already, and with the rehabilitation plans, its future looks even sunnier.
Mike Sparks is manager of Kvaerner in Azerbaijan.
From Azerbaijan International (3.4) Winter 1995.
© Azerbaijan International 1995. All rights reserved.