Parliament of Azerbaijan ratified the agreement on development of two oil fields in Absheron Peninsula with participation of “RussNeft”.
Baku, March 6. /PRIME-TASS/ Parliament of Azerbaijan ratified today the agreement on development of the oilfields “Zykh” and “Govsany” at the South-West of Absheron Peninsula, signed November 2006 between State Oil Company of the country (SOCAR) and “RussNeft”. The participants under the project are: the Russian company – 75%, SOCAR – 25%.
According to the vice-speaker of the parliament, Valekh Aleskerov, the fields Zykh and Govsany have been developed respectively since 1935 and 1948, ITAR-TASS reports. In total, 26 wells are in operation there and oil production according to the data of 2006 amounted to 140 thousand tons. “Net effective pay of the two fields is estimated as 11,5 mln tons of oil”, Aleskerov said.
“Financing of the Azerbaijan interest in the project before starting the development was undertaken by “RussNeft”. “RussNeft” also undertook to increase production at the contract fields 1,5 times as compared with the current level. In case it fails to fulfill this obligation SOCAR can suspend further implementation of the agreement. In this case no invested funds shall be reimbursed”, Aleskerov specified.
The vice-speaker also said that 30 days after the contract comes into force the Russian company shall pay Azerbaijan a bonus of $2 mln and another equal sum after production at the fields increases in conformity with the obligations. He didn’t mention the amount of investments necessary for the development, stressing that it shall be known within the next three months after “RussNeft” prepare the appropriate program of rehabilitation for “Zykh and “Govsany”.
According to preliminary estimate the amount of investments in the project which is to be implemented within 25 years and may be extended for another 5 years is about $ 200 mln. And up to 15% of the funds shall be invested in environmental issues.