In alliance with the Norwegian Statoil company, BP has bought the exclusive right to conduct a feasibility study in the the Dostlug oilfield, offshore in the Caspian Sea.
Dostlug is one of a handful of oil fields which it is estimated will produce 1 billion barrels plus an additional one billion recoverable. Combined, experts said the fields could equal the North Sea in importance. While Azerbaijan now produces only a small percentage of the oil produced daily by the former Soviet republics, it is negotiating cautiously to raise output.
Details of the BP agreement are still being negotiated, but one source close to the deal said they expected the Azerbaijani government and the oil companies to share income evenly, with BP getting about two thirds of the commercial share and Statoil the remaining third.
Michael Heseltine, the President of Britain's Board of Trade, opened the office for British Petroleum in Baku last week. BP is one of several Western oil companies that have been fiercely competing in the race to re-open Azerbaijan's oil industry, which for 70 years has been closed to foreign developers. In the late nineteenth century, development of Baku's central Oil Avenue was dominated by foreign families.
The Russian Information Agency reported last week that Azerbaijan signed preliminary agreements with Penzoil, Remco and their joint subsidiary, Pennzoil Caspial, to develop oil and gas deposits on the Caspian Jihelf.
The Western companies are to invest $2. 5 billion over the next 10 years and will draw up a final version of the agreement within 90 days, Reuters reported.
Along with Russia, Kazakhstan and Oman, Azerbaijan is a member of the Caspian Pipeline Consortium, set up to build a pipeline to deliver, oil from the region to the world market.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.