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Exxon agrees to pay Azerbaijan for curtailed Caspian drilling



AFP
BAKU
Petroleumworld.com 01 25 06


Former Soviet Azerbaijan's state oil company SOCAR said Tuesday that US oil major ExxonMobil will pay 50 million dollars in compensation after backing out of an agreement to drill a Caspian oil field.

ExxonMobil agreed to pay the compensation after it quit drilling in the Zafar-Mashal and Nakhchevan blocks after having made just one exploratory well in each area, according to SOCAR, signaling the field was not commercially viable to develop.

"According to the Product Sharing Agreement ExxonMobil should have drilled two exploration wells in each structure," a SOCAR spokesman told AFP.

No one was available for comment at ExxonMobil's Baku office on Tuesday.

ExxonMobil first began drilling in Azerbaijan's Caspian sector in 2001 but has been beset with constant problems because of the notoriously difficult geology beneath the Caspian Sea bed.

AFP 01/24/06

Copyright © 2006 AFP. All rights reserved

 

 


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