In 2023, a key investor and operator is expected to be replaced in the project for the development of the Karabakh oil field in the Azerbaijani sector of the Caspian Sea, opened in March 2020. As three informed sources in SOCAR told Turan, Norwegian “Equinor” has decided to leave this project and is negotiating the sale of its 50% stake. It is possible that bp, a strategic partner of SOCAR, may acquire this share. “Equinor” is leaving the Karabakh project, it did not want to continue with further work. An official announcement is expected, most likely after this company finds a buyer for its share and enters into an agreement. Formally, the Karabakh project and the neighboring block of the Dan Ulduzu-Ashrafi-Aypara structures (which was also in “Equinor”s area of interest) have been transferred to SOCAR’s balance sheet for now,” one of the sources familiar with the issue told Turan. Recall that in March 2020, SOCAR and “Equinor” announced the first discovery of an oil field since the independence of modern Azerbaijan – the discovery of the Karabakh field with preliminary estimated geological reserves of more than 40 million tons of oil, of which over 21 million tons are recoverable resources. The work was carried out on the basis of “Risk Service Contract” (on a parity basis) signed by SOCAR and “Equinor” on May 30, 2018 in Baku. The productive strata are located at a depth of over 3 km and at a sea depth of over 180 m . It was expected that oil production from “Karabakh” could begin in 2025-26, and the field would produce an average of 5.000 tons of oil and 4.5 million cubic meters of gas per day (SOCAR estimates). For this purpose, a stationary platform was built in Baku (in the Garadagh region at the SOCAR plant). It may be reminded that for the first time SOCAR attracted foreign partners to study “Karabakh” in 1995 (the Production Sharing Agreement was signed with “Devon”, “LUKoil”, “Adir” and the joint venture “LUKAgir” – “CIPCO” consortium), hydrocarbons were identified following the drilling of 3 wells, but the world oil crisis broke out in 1998-99 which led to a drop in oil prices to $12-15 per barrel (the average price for a barrel of Brent in those years), “buried” plans for further implementation of the project, and on February 23, 1999, the PSA for Karabakh was canceled. At present, the average oil price is about $90 per barrel, but “Equinor” has changed priorities, and the company does not want to invest in the “Karabakh” field with small recoverable reserves. It must be remembered that “Karabakh” was discovered by Azerbaijani oilmen in the Caspian Sea in 1959 as a result of seismic surveys 120-130 km east of Baku. Most likely, “Equinor” will not continue the neighboring” Dan-Ulduzu-Ashrafi-Aypara” project (one exploration well was laid on this structure), and the block is transferred to SOCAR’s balance sheet.

Source: Turan News Agency