ExxonMobil to Abandon Azerbaijan Well

ExxonMobil is to abandon its Nakhchivan-1 exploratory oil well in Azerbaijan's sector of the Caspian Sea after failing to find commercial reserves, a company spokeswoman here said on Monday.

The announcment deals a further blow to oil hopes in the Azeri sector, following a series of disappointing results from exploratory drilling on other prospective fields. "We have reached a total depth of 6,746 meters (22,136 feet), a record for Caspian drilling... and the well will now be plugged and abandoned," said the ExxonMobil spokeswoman. No decision had yet been taken on whether to drill further exploratory wells on the Nakhchivan structure. "At the moment we have to study the results of the first well, which will take several months.".

The well was the first to be drilled on the Nakhchivan structure. It was sunk in August last year and was twice deepened beyond its total planned depth after failing to find significant oil.

ExxonMobil is operator of the Nakhchivan consortium and holds a 50-percent stake. The rest of the equity is owned by Azeri state oil company SOCAR. Nakhchivan-1 is the second dry well sunk by Exxon in the Azeri sector of the Caspian. Last year it failed to find commercial oil reserves on the Oguz prospective block and later abandoned exploration there. Other companies have not had much more success. Italy's Eni Agip, France's TotalFinaElf and US group Chevron have all failed to find commercial reserves in other Azeri offshore fields.

The massive Azeri-Chirag-Guneshli oil field and the Shah Deniz gas field, both operated by BP, remain the only major reserves discovered to date in the Azeri sector of the Caspian.