OREANDA-NEWS.  On November, 3 OAO Oil and Gas Company RussNeft and SOCAR have signed an agreement on the rehabilitation, development and production sharing for the Zykh and Govsany block of oil fields in Azerbaijan.

High expenses on resolution of ecological problems of this block were the reason for other Russian oil company LUKOIL to leave this project in 2003. It has estimated the improvement of ecology in $100 million at total investments in the project at the rate of $250-300 million.

Zykh and Govsany are situated in the southern part of the Apsheron Peninsula. The area of a terrestrial block of fields, being transferred to RussNeft development, is 65 square kilometers.

According to the preliminary data, remaining industrial recoverable reserves of the fields amounts to 12 million tons of oil.

The total recoverable reserves of RussNeft exceed 630 million tons. The annual oil output has reached 17 million tons.

The parties highly estimated the prospects of this project performance and pointed it out that the cooperation will be a new incentive for strengthening of Russian-Azerbaijan economic tires.