Azerbaijan

The 604 sq km South West Gobustan area under the EDPSA comprises the Coastal, North and Central blocks, onshore Azerbaijan, approximately 50 km from Baku and is surrounded by large producing fields in this traditional and historical oil producing area. The Duvanny field situated in the Coastal block is considered the largest onshore gas accumulation in Azerbaijan.

The EDPSA was signed and ratified in 1998 for a period of 25 years with a discretionary extension for a further five years. Completion of the minimal obligatory work programme in 2004 secured Arawak’s interest for the remaining 20-year term. PSAs have been the platform for several major projects in Azerbaijan. It is a stable and well-balanced contractual environment which has been successful in rejuvenating and invigorating the Azerbaijan upstream sector.

The blocks contain 13 known structures, a mix of shallow and deep oil and gas reservoirs at depths of 250 to 4,500 metres. Marine sandstones from the productive series are the prime target. In 2007, 3D seismic data was acquired on 245 sq km of the Coastal block, and 407 km of 2D seismic data was acquired in the North and Central blocks, at a total cost of $10.8 million, of which Arawak’s share was $4 million. Prior to this, no modern seismic coverage was available on either the Central or North blocks.

Small quantities of pilot oil and gas production were progressively shut down in 2008 due to water handling problems while seismic data acquired in 2007 on all three blocks were processed and interpreted. Arawak’s net production in 2009 was 28 boepd, or a total of 10,361 barrels of oil equivalent.