CNPC Abandons Plans to Develop Muradkhanly Block

CNPC has abandoned its plans to develop the Muradkhanly onshore block in Azerbaijan, Chinese Ambassador to Azerbaijan Sya Shyyun said. "All talks on this project have been completed. The reason for dropping the project is the difficult geological conditions at the field and the relatively small reserves of oil," he said. The ambassador noted that when reaching its decision to halt work at Muradkhanly, the Chinese side carefully studied information on this zone.

In 2002 CNPC submitted a project for the rehabilitation of the Muradkhanly block to SOCAR. In 2001 Ramco Energy withdrew from a contract to rehabilitate, explore and develop the Muradkhanly, Djafarly and Zardob fields under production sharing conditions. Ramco and SOCAR signed this agreement on July 21, 1998 for 25 years. At the start of April 2000 Ramco Energy completed drilling a first exploration well to a depth of 4,567 meters at the contract zone. However, the volume of hydrocarbons discovered was insufficient to begin commercial production.

The Muradkhanly field was discovered in 1969 and production reached a peak at the field of 1,200 tons per day at the end of the 1970's. When the contract was signed in 1998, Muradkhanly produced only 110 tons of oil per day. According to calculations by SOCAR specialists, proven reserves at this block amount to about 14 million tons.