Salyan Oil eager to set up exploitation well drilling

Great Wall Drilling, a Chinese company, will be involved in well drilling with own drilling rig.

This year Salyan Oil plans to invest around $50m in drilling 5 exploitation and one exploration wells in the Kursangi-Garabaghly bloc. In 2004 the operating company invested the same funds, but could spud only two exploration wells due to geological problems and adjourned the period of exploration drilling in 2005. Great Wall spudded only one well on Kursangi- Garabaghly fields with the depth of 3440 meters. It was put into exploitation with daily debit of 85 tons (over 31,000 tons of crude a year).

In 2004 Salyan Oil produced around 370,000 tons of oil from Kursangi- Garabaghly, or 10,000 tons more than in 2003.

Geological reserves of Kursangi-Garabaghly fields comprise 100 million tons of oil, oil-extraction co-efficiency - 0.2-0.3. Potential residual reserves of the bloc comprise 25 million tons of crude oil.

A 25-year production-sharing agreement on the development of Kursangi and Garabaghly oil fields was signed in December 1998. Salyan Oil was set up a year later, and is currently owned by the State oil company of Azerbaijan (SOCAR), with 50% interest, as well as Chinese companies China National Oil & Gas Exploration and Development Corp. (CNODC) and FAL, each holding a 25% stake.