Socar announces new oil field discovery in Caspian Sea

Istanbul — Azerbaijan state oil company Socar Thursday confirmed the discovery of a new oil field in the Caspian Sea with reserves estimated at 440 million barrels (60 million mt).

The Karabagh field, which it is developing under a 50-50 risk sharing agreement with Equinor, is located 120 km offshore the Azeri capital Baku in 180m of water, with the reservoir at a depth of 3.4 km, Socar said.

The discovery has been made following the completion of the fist appraisal well in the field, drilling of which began in late December.

Socar and Equinor will not drill any further appraisal wells and plan to start work later this year drilling production wells, a Socar official told S&P Global Platts.

In all nine wells are planned for crude production, of which six will be for crude extraction and three for water injection.

In addition, two further wells will be drilled for gas production, with the field believed to hold up to 20 Bcm of associated gas in addition to the crude.

Production is tentatively planned to start in 2021-22, the official said.

The Karabagh field was first identified in 1995 when Caspian International Petroleum Company (CIPCO), which was prospecting the block under a 1995 Production Sharing Agreement, drilled three test wells identifying gas in two and crude in the third.

However the discovery was deemed non-commercial and the PSA terminated.

Equinor has been operating in Azerbaijan since 1992 and in addition to the Karabagh field holds an 8.56% stake in the 630,000 b/d BP-operated Azeri-Chirag-Guneshli field, in which Socar holds 11.64%.

Equinor also holds an 8.71% stake in the 1 million b/d Baku Tbilisi Ceyhan oil pipeline running from the Caspian to Turkey's East Mediterranean coast.