Winter 1997 (5.4)

        Pages
        90-91

        
LUKOIL Signs
        Contract

        The D-222
        Prospect

        
On July 3, 1997,
        LUKoil signed a Production Sharing Agreement (PSA) with SOCAR
        (State Oil Company of Azerbaijan Republic) for the exploration
        and development of the prospect which is presently identified
        simply as D-222. This was the fourth contract that LUKoil has
        signed with Azerbaijan for projects in the Azerbaijan sector
        of the Caspian Sea. It was the sixth contract that has been signed
        between SOCAR and foreign oil companies since 1994. Since July
        1997, SOCAR has signed three additional contracts with the American
        companies in the U.S. White House - Chevron, Mobil and Exxon.

        


        Left: Fikrat Aliyev, Manager of LUKoil in Baku.

        
The signing of the D-222
        Contract in Moscow on July 3, 1997. Left to right, SOCAR President
        Natig Aliyev, Azerbaijan President Heydar Aliyev, Russian President
        Boris Yeltsin and LUKoil President Vahid Alakbarov.

        
LUKoil's Signing
        Ceremony took place in the Kremlin in Moscow in the presence
        of President Boris Yeltsin of Russia and President Heydar Aliyev
        of Azerbaijan. The D-222 contract was ratified by Azerbaijan's
        Parliament (Melli Majlis) on November 3, 1997, and has an effective
        date beginning November 4. Investment for this project is expected
        at $2 billion for estimated reserves of 100 million tons of oil
        and 15 billion cubic meters of gas. LUKoil's share is 60 percent
        and SOCAR's is 40 percent.

        


        
Upper Left is D-222 prospect which
        will be developed by LUKoil and SOCAR.

        
LUKoil's
        share is 60% and SOCAR's share is 40%.

        
Exploration
        of two wells will take place over four years with the possibility
        of extending the drilling period for two additional years if
        necessary. Oil is expected to flow by the year 2007. The D-222
        prospect is the northernmost field for which a contract has been
        signed with SOCAR. It extends over an area of 1,000 sq km and
        is located at sea depths ranging from 40 to 620 meters. The depth
        of the productive layer is estimated at 4,200 meters.



        LUKoil, a major Russian oil company, is rated as the world's
        fourth largest oil producer with the world's largest proven oil
        reserves at 2 billion tons. This company has been involved in
        Azerbaijan since 1993 and already a participant in three consortiums
        (1) AIOC (Azerbaijan International Operating Company) for the
        development of Chirag, Azeri and deep-water Gunashli prospects,
        (2) CIPCO (Caspian International Petroleum Company) for the Karabakh
        prospect and (3) the Shah Daniz Consortium.

        
In addition
        to LUKoil's activities in the oil industry, it is involved with
        numerous other entrepreneurial projects, including a network
        of petrol stations in Azerbaijan, telecommunications (AzEuroTel),
        insurance (Ateshkah), humanitarian activities (LUKoil charity
        fund) and the issuance of gasoline (petrol) credit cards (LICARD).

        
LUKoil

        3 Sabir Street

        Ichari Shahar (Inner City), Baku

        Tel: (99-412) 92-32-35; Fax: 93-48-30



        From Azerbaijan
        International
        (5.4) Winter 1997

        © Azerbaijan International 1997. All Rights Reserved.



        Back to Index AI 5.4 (Winter
        1997)

        AI Home |
        Magazine
        Choice
        | Topics
        | Store
        | Contact
        us