RussNeft and SOCAR to Rehab, Develop Zykh and Govsany

NK RussNeft OAO

Meeting in Baku, Azerbaijan on Friday, officials with OAO Oil and Gas Company RussNeft and SOCAR signed an agreement on the rehabilitation, development and production sharing for the Zykh and Govsany block of oil fields in Azerbaijan. The documents were signed by President of OAO Oil and Gas Company RussNeft Mikhail Gutseriev and President of State Oil Company of Azerbaijan Republic (SOCAR) Rovnag Abdullaev.

First deputy prime minister of Azerbaijan Republic Yagub Eiyubov, Minister of Energy and Industry of Azerbaijan Republic Natig Aliev, Vice-speaker of Azerbaijan Parliament Valekh Aleskerov, Ambassador Extraordinary and Plenipotentiary of Russian Federation in Azerbaijan Vasiliy Istratov and other officials were present are the ceremony.

Zykh and Govsany are situated in the southern part of the Apsheron Peninsula. The area of a terrestrial block of fields, being transferred to RussNeft development, is 65 square kilometers. According to the preliminary data, remaining industrial recoverable reserves of the fields amounts to 12 mln tons of oil.

Zykh field was discovered and put into operation in 1935. Last year 234 wells were drilled there, 169 of which were in operation. In 1997 drilling was resumed at the field. Currently, 25 tons of oil, 470 cubic meters of water, 20 thousand cubic meters of gas are being produced daily from 10 wells.

Govsany field was discovered and put into industrial operation in 1948. For this period 68 wells have been drilled, 42 out of the number have been in operation. At present, 260 tons of oil, 800 cubic meters of water, 90 thousand cubic meters of gas are produced daily from 19 wells.

Annual production at Zykh and Govsany fields during the first year is supposed to be 110 thousand tons of oil and will double in the following years. While operating at the fields OAO Oil and Gas Company RussNeft plans to allocate massive investment to ecological problems solving at the oil fields.

The parties highly estimated the prospects of this project performance and pointed it out that the cooperation will be a new incentive for strengthening of Russian-Azerbaijan economic ties.