Autumn 1999 (7.3)
Major Gas Reserves
Found in Shah Daniz
by Khoshbakht Yusifzade
The first exploratory well of Shah Daniz was completed this summer on July 28, 1999, turning up surprisingly vast amounts of gas-twice as much as was originally expected. This well is the deepest ever drilled in the South Caspian with a semi-submersible drilling rig. Current estimates are 700 billion cubic meters of gas and 70 million tons of condensate. Andy Hopwood, BP Amoco's President, calls it "a field of worldwide importance".
Khoshbakht Yusifzade, SOCAR VP
Hopwood said, "Even at this early stage, this discovery has confirmed the exciting potential to create a new dimension, namely gas exports, in the development of Azerbaijan's energy industry." He named Turkey as the greatest potential market. The offshore Shah Daniz structure lies 70 km southeast of Baku, in water depths ranging from 5 to 550 meters. The structure is 30 km long, 12 km wide and has a 400 sq km area.
Photo: Participants at the Signing Ceremony for Shah Daniz, October 17, 1996.
The structure was first identified by Azerbaijani geologists more than 40 years ago, in 1954, but was too deep to pursue using the drilling technology that existed at the time. In 1976, Azerbaijani geophysicists reconsidered the structure, conducting seismic studies to prepare it for deep-sea drilling. The study was completed in 1983.
The first well (N5) was drilled in 1984 but only reached a depth of 906m. Again, drilling was stopped for technical reasons. A second well (N6) was attempted the following year, but was stopped at 5,285m. By the time a third well (N4) was drilled to 2,200m, it was 1992, and the collapse of the Soviet Union prevented any further development of the structure because of a lack of investment and equipment.
On June 4, 1996, Shah Daniz became the third major oil contract to be signed in independent Azerbaijan. The contract was ratified by Parliament on October 4 and became effective October 17. BP Amoco was named operator. The contract's implementation requires an investment of approximately $4 to 5 billion, $150 million of which covers expenses for the initial 3-year exploratory period.
Rashid Javanshir, Shah Daniz manager
Exploratory projects were carried out in 1997 by companies such Caspian Geophysical and Racal and included seabed surveys, 3D seismic surveys, hazard surveys and a rig upgrade project-Shelf 5, which is now called Istiglal (Independence).
Drilling of the first Shah Daniz exploratory well, SDX-1, began on July 7, 1998 using the Dada Gorgud rig to a depth of 6,316 meters. On July 28, 1999, the well was completed. Testing showed that its reserves include 1.5 million cubic meters of gas and 377,000 tons of condensate daily. The gas condensate was found in three separate horizons.
A second exploratory well, SDX-2, began being drilled on May 2, 1999 using the Istiglal rig. SDX-2 is located 6km south of SDX-1 and has already reached a depth of 4,016m. By mid-October 1999, drilling should be complete.
These are not final estimates. As more wells are drilled and tested, it may prove that Shah Daniz has reserves of more than 1 trillion cubic meters of gas resources.
Dr. Khoshbakht Yusifzade is a Vice President of SOCAR.
From Azerbaijan International (7.3) Autumn 1999.
© Azerbaijan International 1998. All rights reserved.
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