OREANDA-NEWS. June 19, 2009.  The State Oil Company of Azerbaijan (SOCAR) has begun practical development of a Caspian field within the framework of independent (first time for the last 28 years) field development in the Caspian Sea without foreign companies’ participation.

The Company reports that drilling of the first exploration well with depth of 6,500 m has been launched at Umid structure. Drilling is conducted from two-jacket platform Umid-1 (up to AZN 140 million has been invested in its project).

Initially SOCAR planned to commission Umid-1 for drilling works this April.

Later last year SOCAR installed the second jacket of Umid-1 two-jacket platform. The second jacket sailed away from the water area of the Baku Deepwater Jackets Factory named after Heydar Aliyev on November 28.

The second jacket will be connected to the first one by a 110 m bridge to be assembled for the next few weeks. Sea depth in this area makes 58 meters.

Commissioning of Umid-1 and start of drilling were scheduled for April 2009. Six gas producing wells to the depth of 6,400 m will be drilled from it.

The Umid-1 first jacket installed earlier has height of 68 m and weight of 2,300 tons, while the second jacket has the same height but weight of “only” 1,900 m. The customer is oil and gas producing division “N.Narimanov”, the customer is Neftqaztikinti trust, and the subcontractor is Factory of Offshore Deepwater Jackets named after Heydar Aliyev. The project was developed by institute Neftqazlayihe.

A jacket for Umid-1 platform is being assembled from parts fabricated in 1990 for Chirag-6 platform but not used for the purpose.

SOCAR president Rovnag Abdullayev ordered to establish a commission on offshore installation and assembling of the platform. Agasaf Aliyev, the director of the SOCAR Department of Capital Investments, headed the commission.

The platform is designed for operation for 40-50 years.

This June SOCAR founded joint venture Socar-Umid LLC (SOCAR/Nobel Oil Exploration & Production (Saint Kirts) - 20/80% respectively) for drilling works at Umid field in Azerbaijani sector of the Caspian.

Socar-Umid LLC was established with formal charter capital of AZN 1 000. At present SOCAR is ready to conduct exploration at Umid independently.

Earlier an interest to the block was displayed by Germany’s Wintershall/RWE. In December 2007 SOCAR launched exploration of the 7th productive horizon on Umid structure. SOCAR expects to drill three exploration wells at Umid and the same quantity of wells at Babek.

"In case results of exploration at Umid structure are positive, the necessity of exploration on Babek structure will increase sharply,” said earlier SOCAR’s 1st vice president Khoshbakht Yusifzadeh.

SOCAR considers Umid/Babek block the most prospective structure at the moment. The block is located in deepwater part of Azerbaijani sector of the Caspian Sea.

According to preliminary data, annual production over here can reach 14-15 bn cu m of gas at the peak of development and hydrocarbons reserves can total 200-300 million tons of oil equivalent.

By the present Azerbaijan has discovered 71 oil and gas fields, including 43 onshore and 28 offshore ones. 54 fields are under development and 9 under exploration. The Programme of Fuel & Energy Complex for 2005-15 stipulates exploration (drilling of 19 wells to require AZN 2.76 bn of investments) of such prospective structures by SOCAR as Umid, Babek, Ashrafi, Garabagh and others. In period of 2008-15 SOCAR expects to drill 19 wells – by three wells at Umid, Babek, Absheron and Ashrafi, by two at Nakhchivan, Zafar/Mashal, Garabagh, one at Dan Ulduzu.