SOCAR decides to get rid of some old fields

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The Milli Majlis (Parliament) of Azerbaijan received a bill “On the adoption and approval, permission to implement a risk-service contract between SOCAR and GL International LTD for the restoration and development of the Buzovna-Mashtaga block of oil fields” , “Gala” and “Zira”.

This bill was considered yesterday at a meeting of the parliamentary committee on natural resources, energy and ecology of the Milli Majlis.

Tural Mahmudlu, head of the SOCAR Upstream LTD group, made it clear that the contract between the State Oil Company of Azerbaijan and the private company GL International LTD was signed on December 14, 2021.

At the same time, he did not tell the deputies about the achievements in the oil sector of this private company, and did not explain why SOCAR chose it as a partner in the development of old fields.

Although the Chairman of the Parliamentary Committee, Sadig Gurbanov, in his opening speech spoke about the advantages of the project, such as attracting local investments, developing local companies and personnel, and introducing new technologies.

The peculiarity of this contract is that after the entry into force of the agreement, SOCAR’s contractor, GL International LTD, will study the fields within 24 months, that is, how to increase oil recovery from old wells, as well as at what points new wells are to be drilled.

After that, a field development program is drawn up, commercial proposals are submitted to SOCAR, and after the approval of the commercial agreement, the company on the contract area gets the opportunity to carry out its activities for 25 years, that is, presumably until 2050.

This is practically when the duration of the largest oil contract in the history of Azerbaijan, Azeri-Chirag-Guneshli, with reserves of 1 billion tons, will expire.

The Buzovna-Mashtaga field is located in the northeast of the Absheron Peninsula, between the villages of Mashtaga and Buzovna. The deposit covers an area of ​​588 hectares.

Industrial development began in 1941. From the beginning of the development of the field until January 1, 2021, 1,326 wells have been drilled on it. About 29.74 million tons of oil and about 5.4 bcm of gas have been produced from these wells so far.

The “Gala” field is located in the eastern part of the Absheron Peninsula between the villages of Bina, Mardakan and Gala. From the beginning of the development of the field until January 1, 2021, 1,517 wells have been drilled on it, currently 73 of them are in the operating fund. 41 million tons of oil, 9.7 bcm of gas.

Caspian Barrel decided to collect public information about GL International LTD.

It turned out that the company has a website (www.gl.world). However, it does not contain any news about the company’s activities. Yes, this is a little strange – the company did not consider it necessary to announce that it had signed a contract for the development of several Absheron fields with the State Oil Company of Azerbaijan. There were no messages even about this on the company’s page on Linkedin (a social network for business communication).

SOCAR did not report this either. She has already done this in practice. On April 21, 2017, when discussing the bill on the development of the Umid gas condensate field in the Milli Majlis, the public learned that SOCAR had signed a contract on January 12 of the same year. Moreover, the type of contract was a risk-service.

However, on the first page of the site, you can see that the company’s assets include two more fields in the life of Azerbaijan – Kursengi and Garabagli, which are being developed by the operating company Salyan Oil. For almost 20 years, the operator there was a Chinese state-owned company – CNPC with a 50% share. The site also states that GL Investment, a subsidiary of GL, owns a 50% stake in Salyan Oil Limited.

The GL website does not state when the company was formed. However, on Linkedin, the date of birth of the company is shown as 2019. And its head Asif Zeynalov, who worked for bp-Azerbaijan for many years, was appointed CEO in April 2019. There you can also find information that the number of the company is over 200 people.

* Oil fields “Buzovna-Mashtaga”, “Gala” and “Zira” were previously developed by Azneft (SOCAR’s production structure). 

Caspian Barrel


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