"This is our first major step in diversifying our investment portfolio and if successful will add substantially to our reserve resource potential," commented the Chairman and CEO Lorrie T. Olivier.
Azerbaijan is a key petroleum producer in the region with an estimated 6.6 billion barrels of remaining reserves, second only to Kazakhstan in the Caspian Region. The country has a long history in its petroleum industry development and is one of the key countries in the region for not only its oil and gas production but for its infrastructure development with several major export pipelines. The Northern Export Route (NER) Pipeline, with 50,000 barrel per day capacity, and the Western Export Route (WER) Pipeline, with a 140,000 barrel per day capacity take crude oil to the Black Sea ports for export to western markets. The Baku-Tbilisi-Ceyhan (BTC) Pipeline is planned for a capacity of 1.2 million barrel per day and will provide a direct route for Caspian region oil to Mediterranean export markets. The pipeline is scheduled for completion and operation in 2005 with an initial capacity of 500,000 barrels per day and should relieve much of the congestion in exports through the Bosporus Straits in the Black Sea.
"The company will be targeting projects that have existing proved reserves with potential for expansion as well as those with low risk upside opportunities. This upside potential could be within the same reservoirs as existing production or underlying the existing proved reserves. Current targets for acquisition have the potential to substantially increase the company's reserve base and production capabilities," added Bruce Falkenstein VP Exploration. The company will be reorganizing and adding to its operating staff to accommodate this expansion of operations. Funding for the current level of operations will be met from existing working capital. Development and exploration capital required for project are expected to be funded through the equity and or debt instruments supported by the size of the fields acquired.
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