ExxonMobil to Begin Drilling at Zafar in 3Q 2003

ExxonMobil has plans to begin drilling the first exploration well at the Zafar structure in the Azerbaijani sector of the Caspian in September 2003. The exploration well will be drilled by the new Maersk DSS-20 semisubmersible. The rig is currently under construction in Baku and delivery is expected in the second half of 2003. EAOC General Manager Drew Goodbread said in terms of its technical possibilities, this will be the most powerful semisubmersible drilling rig in the Caspian and will be used to drill at a sea depth of up to 1,000 meters." In turn, EAOC Drilling Manager Richard James said that the well would be drilled 136 km southeast of Baku and 90 km from shore. The sea depth in the region is 1,618 meters. He said that the well depth would amount to 6.8 km.

An agreement for the exploration, development and share distribution at the Zafar and Mashal structures was signed on April 27, 1998 and ratified by the Azerbaijani parliament on May 8, 2000. The contract is divided as follows: the State Oil Company of the Azerbaijani Republic (SOCAR) - 50%, ExxonMobil (the operator) - 30%, ConocoPhilips - 20%. Forecast reserves at the structure are estimated at 140 million tons.

In addition to this structure, ExxonMobil has a share in other oil contracts in the Azerbaijani sector of the Caspian Sea: in a contract for the exploration and development of the Oguz structure - 50%, the Nakhchyvan structure - 50%, the Araz-Alov-Sharg structure - 15% and the Azeri-Chirag-Gunashli project - 0 8%. Total investment by the company in all of these projects will exceed $1 billion.