Azerbaijan has experienced some important changes in its oil sector over the last year. The good news is that the country's main oil producing consortium, AIOC, has a clearer sense of direction.
Over the past year, the two lead companies in AIOC, BP and Amoco, have completed their merger, and AIOC is now operated by BP Amoco with a 34 percent stake in the consortium. The decision-making process has been streamlined.
At the same time, two of the world's largest oil companies -- BP Amoco and the newly merged ExxonMobil -- are partners in AIOC.
In fact, the two companies with the most significant upstream presence in Azerbaijan are now BP Amoco and ExxonMobil.
In addition to being an operator in Azerbaijan's major oil producing field, BP Amoco is also the operator of what will be Azerbaijan's first major gas producing field, Shah Deniz.
During his February visit to Washington, D.C., President Aliyev welcomed the announcement that the drilling of the second well at Shah Deniz shows will produce adequate gas reserves to start gas exports to Turkey in 2002-2003. As well as being a major oil exporter, Azerbaijan is becoming a significant gas exporter.
There are now 24 companies from 14 countries which are active in Azerbaijan's offshore. Several important new entrants farmed into Production Sharing Contracts in 1999 and 2000 include: Shell, Conoco and Canada's Alberta Energy Co. (AEC). Onshore, 11 companies are active.
Information accurate as of February 2000
Shallow water Gunashli Field: Conoco to sign risk service contract, likely to inclue Ramco.
Val Abiha Structure (D-12/13/15/19), bordering Turkenistan Sector of Caspian Sea, with some parts overlapping with Turkmenistan offshore tender.
By Julia Nanay, Director, The Petroleum Finance Company
© 2000 Mena Report (www.menareport.com)