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Oil production in Azerbaijan
- By Oil and Gas Author
- Published 08/29/2006
- Petroleum Pipeline , Offshore Drilling , Oil and Natural Gas Prices , Environment and Pollution , Liquefied Natural Gas LNG , Exploration and Discoveries , Natural Gas Petroleum , Crude Oil Petroleum
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View all articles by Oil and Gas AuthorBP sources said talks on a possible fourth phase, which includes an additional platform to be installed in an undeveloped area between the Chirag and Guneshli fields, is active again after losing momentum during 2005. Outside of the ACG field, not all of Azerbaijans foreign investment projects have been successful, with several projects announcing disappointing drilling results and several production sharing agreements (PSAs) shutting down in recent years. Besides the ACG project, many of Azerbaijans offshore prospects have been relatively disappointing in contrast to the high expectations for the Caspian Sea region during the 1990s. Most recently, the failure of ExxonMobil and Lukoil to discover commercially viable hydrocarbon reserves at the Zafar-Mashal and Yalama blocks, respectively, will lower future production estimates from Azerbaijans offshore area. The first Well at Zafar-Mashal was the deepest in the Caspian Sea, reaching a total depth of over 22,000 feet (6,600 meters) and was the most expensive at around $100 million. Exxon Mobil announced in January 2006 that it will pay the Azerbaijani government $32 million claim to exit exploration at the Zafar-Mashal field. The Yalama Block was the last drilling program underway in offshore Azerbaijan. Finally, without an agreement on the maritime borders in the Caspian Sea, entire fields have been left untapped due to the lack of clarity on ownership.
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