Publication: Monitor Volume: 2 Issue: 234

Azerbaijan and the members of an international consortium signed on December 14 in Baku a contract to develop the Ashrafi and Dan Uluzu oil fields on Azerbaijan’s Caspian shelf. The consortium consists of the U.S. company Amoco with a 30 percent stake as project operator; an alliance of the California-based UNOCAL with 25.5 percent and Saudi Arabia’s Delta with 4.5 percent; and Japan’s Itohu and Azerbaijan’s State Oil Company with 20 percent each. The foreign partners are financing Azerbaijan’s stake. Worth $2 billion over a 25-year period, the project is due to yield the first commercial output in the year 2003 and to produce 7 million tons of crude oil annually beginning in 2007. The estimated reserves of the two fields are 150 million tons of oil and 50 billion cubic meters of natural gas. The contract area covers some 450 square kilometers, at depths ranging from 75 to 200 meters, situated approximately 35 nautical miles off Azerbaijan’s Apsheron peninsula.

The contract, which is Azerbaijan’s fourth with international consortiums, increases the value of international investment commitments in Azerbaijan’s oil and gas projects to nearly $13 billion. This latest contract is also the first without any Russian participation. LUKoil has minor stakes in Azeri-Chirag-Guneshli and Shah Deniz and a major stake in the "Karabakh" project.

Speaking at the signing ceremony, President Haidar Aliev obliquely accused Russia — referred to as "foreign forces" — of "seeking to jeopardize Azerbaijan’s international oil contracts" by claiming that they contravene the Caspian Sea’s legal status. Aliev stated that such objections are irrelevant and that Azerbaijan will not change its policy, which has the "full support of the USA.". Amoco chairman Don Stacy stated at the same ceremony that Amoco hopes to sign another major contract for offshore fields in the southern part of Azerbaijan’s sector. (Western agencies, Petroleum Information Agency, Turan, December 14)

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