Three Oil Majors Trying to Quit Drilling in the Caspian Sea

SOCAR is in negotiations with three oil majors which want to end exploration in the Azeri sector of the Caspian Sea after poor drilling results. SOCAR is in discussions with TotalFinaElf, Agip and ExxonMobil respectively on how they can end their drilling projects.

According to the contracts with SOCAR, the companies are obliged to drill a certain number of exploration wells. The oil companies are now suggesting paying compensation to SOCAR rather than continuing to drill.

TotalFinaElf said in June it wanted to end exploration at the Lenkoran Deniz and Talysh Deniz concessions after a first well in Talysh Deniz proved uncommercial. Under the terms of a 1997 contract with SOCAR, TotalFinaElf is supposed to drill a test well in each of the two fields. The company said it had suggested compensating SOCAR.

Agip, operator for Kurdashi project, said it decided not to drill a third well after disappointing drilling results. ExxonMobil last month decided to abandon drilling at the Orguz concession after reporting a dry well.