SOFAZ revenues from development of Balakhani block grow

In 2020, actual production at the Balakhani block of Azerbaijan’s onshore oil fields amounted to 1.57 million barrels, which is 99.4 percent relative to the forecast (1.58 million barrels), reads the conclusion of the Accounts Chamber on the execution of the budget of the State Oil Fund of Azerbaijan (SOFAZ) for 2020, Report informs.

SOFAZ received $6.26 million from these fields, which is 46.95 percent more than the funds worth $4.26 million envisaged in the budget. This is because in 2020, the profit tax of the operating company was not formed, and oil prices rose at the end of 2020.

The Balakhani-Sabunchu-Ramana oil and gas field is located 12 kilometers northeast of Baku. The area was discovered almost in 1869 and has been in operation since 1871. There are 1,124 operating wells and 328 inactive wells at the field.

The field is being developed by the Balakhanineft Oil and Gas Production Department (SOCAR structure). In 2010, SOCAR and the German company UGE-Lancer signed a 25-year agreement on exploration, rehabilitation, development, and production from the block, including the Balakhani, Sabunchu, Ramana, and Kurdakhani fields. The contract area is 16.14 square kilometers. SOCAR’s share is 25 percent and Lancer’s 75 percent.