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LUKoil pulls out of D-222 Block Offshore Project in Azerbaijan

26 February 2009 08:25 (UTC +04:00)

Andrey Kuzyaev, the President of LUKoil Overseas, told reporters that the project in which Franceâ€™s GDF Suez also holds a 15 percent stake after acquired part of LUKoilâ€™s participating interest last year doesnâ€™t hold commercially exploitable oil.
According to him, the foreign shareholders in the project now have no outstanding obligations before the State Oil Company of Azerbaijan (SOCAR).
Prior to this, Lukoil Overseas had completed seismologic and other necessary exploration work and drilled two exploration wells. After reaching 4 500 meters deep, the group found no hydrocarbon reserves there.
Initially, Lukoil (60%) and SOCAR (40%) signed exploration, development and production sharing agreement on the block on July 3, 1997.
D-222 Block, straddling Azerbaijani and Russian sectors of the Caspian Sea, is part of Yalama Structure that is 70-80 meters far from the shore.
Yalama was first estimated to hold 800 million barrels of oil and 50 billion cubic meters of natural gas. The project costs $2.5 billion in investment.