OREANDA-NEWS. December 23, 2009. President of the State Oil Company of Azerbaijan (SOCAR) Rovnag Abdullayev and Director General of Bahar Energy limited (United Arab Emirates) Richard Makdugal signed in Baku the agreement of PSA type on exploring, rehabilitation, development and sharing arrangement of extraction from the block of fields Bakhar and Gum-daniz. Under the contract  share of Bahar Energy limited in the project will make 80 %, SOCAR - 20 %.

“It is 28th contract of PSA type signed by Azerbaijan. Interest to oil and gas sector of Azerbaijan was always large. We believe that investment obligations which Bahar Energy ltd undertakes, will be fulfilled and this block of fields will receive “the second breath”,” R. Abdullayev said.

According to him, the contract is designed for the term of 25 years with opportunity to prolong it for another 5 years. Originally, the investment program is estimated at USD 1 bn.  Remaining gas reserves in the contract block make up 25 bn cu m. Bahar Energy limited will invest all volume of investments.

“The contract consists of two parts. The first part includes rehabilitation and development  work, the second – exploring work. Exploring concerns Bakhar field. There is structure Bakhar-2 in this fields and exploration work is planned in  Bakhar-2,”  R. Abdullayev said

One exploratory well will be drilled over three years in this structure and one more exploratory well can be drilled when required during the fourth year. The contract also stipulates increase of volume of extraction  1.5 times over three years in comparison with the  2008 index,  when volume of oil production in the block made 54,000-55,000 tons and 195 million cu m of gas.

“At the initial stage, it is planned to drill  50 wells  and repair  100 existing well in  the contract block,”  R. Makdugal said.

“Under forecasts of experts of SOCAR, production rates of gas in Bakhar field will reduce by 15% over  forthcoming 5 years and production rates of condensate  - by 10 % per annum. In this connection,  SOCAR considers that it is possible to achieve stabilization of extraction and increase in remaining reserves of hydrocarbons by attracting foreign investments to implement rehabilitation and development  program in the block of fields Bakhar and Gum-daniz over short term,” R. Abdullayev said.

Oil field Gum-daniz is located 21 km south-east from Baku. The deposit was put into operation in 1955. 28.897 million tons of oil and 26.995 bn cu m of gas have been extracted from the field until now.

Gas deposit Bakhar was brought into development in 1969. Over all period of exploitation, 16.833 million tons of oil and 128.688 bn cu m of gas have been produced from the field.