SOFAZ: Surakhany Oil is most successful among Azerbaijan onshore operation companies

As of October 1, year 2014, 74,400,000 USD was transferred to the State Oil Fund of Azerbaijan for development of the Surakhany onshore field.

Baku. 18 November. REPORT.AZ/ Surakhany Operating Company is the most successful company among Azerbaijan onshore operation companies (operating company NOVATIS Oil). Due to official data, on the contracting area "Surakhany" was produced 573 tons oil as of January 1, 2014. Although, according to contract liabilities, Contractor should be implement the level up to 257 tons. Because of this high index, no any even onshore operating company, as well BP Azerbaijan (this company became lagging behind planned indexes from 2009) can compete with Surakhany Operating Company. As of October 1, 2014, 74,400,000 USD was transferred to the State Oil Fund of Azerbaijan for development of the Surakhany onshore field.

Report informs, referring information given by SOFAZ, the funds were received since commissioning of the production sharing agreement (PSA) and till now none of the operation companies has brought so much profit to the state from the onshore fields.

It should be noted that, the contract for the Surakhany project was signed on August 16, 2005 in Baku between SOCAR (25%) and NOVATIS Oil offshore company (previous name Rafi Oil, UAE – 75%). This was the 26thPSA signed by SOCAR since September, 1994.

Total area of the contract bloc is 13 square kilometers. Development of the Surakhany group of fields started in 1904 and since that time till mid year 2005, 114,597,000 tons of oil and over 10 billion cub.m. of gas was extracted here. The peak of oil production on the field occurred in 1931 and it produced 4,189,000 tons of oil. Then SOCAR’s geologists believe that the residue extractible resources of the contract area total 6,822,000 tons.

After that only once - in year 2011 SOCAR posted information on its web-site that, volume of oil extracted on the contract area reached 115,5 million tons. This means that, during 5.5 years 1 million tons of oil was extracted as a part of PSA.

According to the contract conditions, the project operator has committed itself to increase daily oil production on the contract bloc by 1.5 times within two years. The contract, which has been discussed and approved by the parliament deputies, envisaged that the contractor commits itself to increase production up to 257,000 tons by 2014.

If we made a conclusion (concerning results of year 2005, 130.000 tons oil was extracted from the contract bloc), then already in year 2007 NOVATIS Oil company from the Surakhany oilfield should extract approximately 200.000 tons of oil for implementing its contract liabilities. However, evidently, during the 5 years oil exploitation program double fulfilled by the Contractor. 

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