Eurasia Completes Development Plan Field Work in Azerbaijan
Eurasia Energy Limited has completed all field work necessary to conclude the development plan for Eurasia's 600 square kilometer offshore oil and gas block in the Republic of Azerbaijan. Two visits were made to the Azerbaijan capital of Baku in September, 2006 by management of Eurasia and Eurasia's consultants, TRACS International Consultancy Ltd. and Genesis Oil and Gas Consultants Ltd. During the first site visit, management and TRACS met with SOCAR's head office personnel, and the geologists and petroleum engineers working for (a) SOCAR's offshore exploration unit responsible for the Block and (b) SOCAR's offshore field development, production and maintenance unit responsible for the Alyat producing field and the non-producing Garasu field. Discussions focused on the analysis of data and information supplied by SOCAR to date and identified further information and data regarding geology, structure of the fields, exploration targets and drilling and production history of wells drilled to date. There were also initial discussions regarding the current and historic costs of developing and operating the producing fields on the Block as the basis for future economic estimates and negotiations for the Exploration, Rehabilitation, Development and Production Sharing Agreement ("ERDPSA").
The second site visit to Baku occurred at the end of September, 2006. Management and TRACS were accompanied by a specialist facilities engineer from Genesis. The main purpose of this visit was to inspect the offshore platforms and oil and gas producing facilities in the Alyat field, and SOCAR's on-shore oil and gas terminal serving the field. SOCAR provided Eurasia's team with a supply vessel and crew for the trip to the offshore Alyat field. The team had the opportunity to inspect various oil and gas producing platforms, gas injection, treatment separation and distribution facilities as well as the recently completed well number 87 and the recently spudded well number 88. The Eurasia team also visited a SOCAR oil and gas terminal which receives, treats, stores and delivers oil and gas from a number of SOCAR offshore and onshore fields. The team inspected the terminal's complete installation from the landfall of the pipelines coming from the Alyat field to the oil and gas export delivery points. This inspection included oil separation and treatment plants and storage tanks.
Eurasia expects its development plan for the Block to be completed by the end of October. Management of Eurasia will be returning to Baku in early November to attend scheduled meetings with SOCAR for the purpose of negotiating the main principles of the ERDPSA.
Eurasia Named in Lawsuit
Eurasia and its Chief Executive Officer, Nicholas W. Baxter have been named in a law suit commenced in the Court of Session in Edinburgh, Scotland. Eurasia and Mr. Baxter have been sued by Arawak Energy Corporation ("Arawak") and its wholly owned subsidiary, Commonwealth Oil & Gas Company Limited ("Commonwealth"). Mr. Baxter was a director of Arawak until May 5, 2003. Mr. Baxter was periodically a director of Commonwealth until February, 2006. Eurasia is not associated with or connected to Arawak or Commonwealth in any business or contractual context. Arawak and Commonwealth allege that in the course of his directorship, Mr. Baxter breached his fiduciary duty as a director and accessed and used confidential information relating to Arawak and Commonwealth oil and gas properties in Azerbaijan for the purpose of securing Eurasia's MOU for its Block in Azerbaijan. Eurasia has been made a party to the action as an alleged knowing recipient of confidential information and of a commercial opportunity diverted to it in breach of fiduciary duty. Arawak and Commonwealth are seeking US$17.2 million in damages from Mr. Baxter, a declaration that Eurasia holds its MOU in trust for the benefit of Arawak and Commonwealth and an accounting of profits up to US$100 million or alternatively damages against Mr. Baxter and Eurasia for breach of confidence in the same amount. Eurasia and Mr. Baxter have retained joint counsel and will be filing an appearance and defense in due course.
The allegations of misappropriation of confidential information by Mr. Baxter and Eurasia and of breach of fiduciary duty by Mr. Baxter with the knowledge of Eurasia are completely rejected both on the facts and on the law. Unfortunately, this action serves to malign both the character of Eurasia's management and the integrity of our project in Azerbaijan. Eurasia will aggressively defend the action by Arawak and Commonwealth while continuing to advance its interests in Azerbaijan with the negotiation and execution of the ERDPSA. Eurasia has sufficient cash on hand to finance all of its development work in Azerbaijan and to pay the costs associated with the Arawak/Commonwealth lawsuit.
- Russian Watchdog Says Schlumberger-Eurasia Drilling Deal 'Has Big Problems' (Aug 16)
- Eurasia, Schlumberger to Swap Russian Assets (Oct 05)
- Tax Cuts Likely to Benefit Russian Oil Service Companies (May 28)