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Umid gas field

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Umid
CountryAzerbaijan
BlockUmid-Babek
Offshore/onshoreOffshore
OperatorSOCAR
Field history
DiscoveryNovember 24, 2010
Start of productionSeptember 2012
Production
Estimated gas in place200×10^9 m3 (7.1×10^12 cu ft)

Umid gas field (Template:Lang-az) is the second largest natural gas field in Azerbaijan. It is situated in the South Caspian Sea, off the coast of Azerbaijan, approximately 75 kilometres (47 mi) southeast of Baku, at a depth of 170 metres (560 ft).[1][2] In translation from Azerbaijani, Umid means Hope.[3]

History

Umid field is a part of a block previously consisting of Umid and Babek fields.[4] The geophysical works at Umid started in 1953 which were repeated in 1972. A total of 9 wells were drilled in the area from 1977 to 1992, however no commercially viable fields were discovered at the time.[1][5] In 2009, SOCAR financed the exploration works at Umid itself.[6] This is the first time since the Contract of the Century that Azerbaijan conducted exploration works entirely on its own.[7] The discovery of 200 bcm and 30-40 million tons of condensate (around 270-360mn bbl) initially forecasted by Khoshbakht Yusifzadeh was announced by SOCAR on November 24, 2010 after successful drilling at 6,500 metres (21,300 ft) on exploration platform Umid-1.[8][9]

President Ilham Aliyev of Azerbaijan placed enormous hopes on the Umid gas field, remarking in 2010: "This field has a great future".[10] In 2012 President Aliyev continued pinning great hopes on the competent development of the Umid gas block as part of overall major gas export strategy for Azerbaijan: "One of the wonderful events of recent months is that early gas has been produced from “Umid” field. This is a great indicator. The rate of the gas wells is very high. The first well has very encouraging figures. So “Umid” lives up to its name. The discovery of “Umid” by the State Oil Company of Azerbaijan is a historic event. The State Oil Company has managed to develop this large gas field on its own for the first time in recent years."[11]

The joint venture of SOCAR with Nobel Oil Group drilled three wells in the Umid gas field since 2012. One well failed, while the other two produced decreasing amounts of natural gas: in 2012 – 1,500 thousand cubic meters of gas, 2013 – 638,000 cubic meters, and in 2014 - 630,000 cubic meters of gas per day. The plan was to drill a total of six wells producing one million to 1.5 million cubic meters of natural gas per day.[12]

The Nobel Oil Group is a corporate group operating primarily in the USA (Permian Basin), UK, in the Republic of Azerbaijan and in Romania. The Group provides integrated operating services within the oil and gas sector and is also developing its exploration and production capabilities. The group was set up by Azerbaijan-born Mr. Nasib Hasanov, the owner and founder of Nobel Oil Group.[13] As a result of reorganization in 2014, all service segments of the oil and gas industry were united under Nobel Oil Services (UK) Limited, which is a parent company of Global Energy Solutions LLC, Prokon LLC, Absheron Drilling LLC, Llamrei DMCC, etc.[14] The exploration and production business was separated under the name of Nobel Oil E&P (UK) Limited (Nobel Upstream trademark), which is a parent company of Nobel Oil E&P Caspian Limited, Nobel Oil E&P North Sea Limited, Nobel Oil E&P North America (UK) Limited, and Nobel Oil E&P North America LLC.[15]

In October 2014 SOCAR and Nobel Oil Group decided to stop all drilling due to "technical problems in the production process",[16] and announced a new international tender for a fresh foreign partner to lead the way and create a new strategy.[17][18] As of January 2016, the tender has not been materialized. Since March 2015 SOCAR and Nobel Oil Group decided to drill a new appraisal well to get a better estimate of gas reserves in Umid, and hope that this drilling expense will be absorbed by the future foreign partner.[19] [20] According to the wishes of SOCAR and Nobel Oil Group the new foreign partner must have not only the skills and experience of deep-water offshore drilling, but also have available cash reserves.[21]

According to expert determinations, the Umid ("Hope") gas field was too technologically challenging for the two companies developing it, despite spending some $5 billion USD already by 2010, and expecting, at the time of high gas prices, about $45 billion in net operating income.[22] Since 2010 expenses have only increased whilst natural gas market prices have fallen.[23][24]

Ownership

The gas field currently JV between SOCAR (80%) and Nobel Oil (20%) companies.[25] The JV's founding capital was just 1,000 AZN.[26]

It has been reported that Statoil was negotiating in 2013 to take a major role in developing a cluster of Umid, Babek, Zafar and Mashal fields.[27]

Reserves

SOCAR leadership estimates that with further drilling, the overall reserves at Umid are likely to reach 300 bcm while those of Babek field lying under Umid will reach 600 bcm. Drilling at Babek will also be done by SOCAR.[1] The Azerbaijan's total gas reserves are estimated at 3 to 5 trillion cubic meters (tcm).[6] The discovery will boost Azerbaijan's potential as gas exporter to Western countries through the European evacuation route, i.e. Trans-Adriatic pipeline or Nabucco West pipeline.[28]

See also

References

  1. ^ a b c "First time for 28 years SOCAR has discovered independently a gas field in Caspian with reserves of 250 bn cu m". Abc.az. 2010-11-25. Retrieved 2010-12-06.
  2. ^ "Umid Discovery Suggests Upside Potential To Reserves". Oil and Gas magazine. November 2010. Retrieved 2010-12-06.
  3. ^ Ali Ahmedov (2010-11-24). "Large gas field discovered in Azerbaijan". Azeri Press Agency. Retrieved 2010-12-06.
  4. ^ "Открытие месторождения "Умид" по существу приводит к открытию очень крупных газовых месторождений – Ильхам Алиев" [Ilham Aliyev: "Discovery of Umid field will lead to discoveries of large gas fields"]. Ekho-Az. 2010-11-25. Retrieved 2010-12-06.
  5. ^ "Aliyev: Azerbaijan will have a say as gas exporter". Azernews. 2010-11-26. Retrieved 2010-12-06.
  6. ^ a b "Socar tallies up giant Umid field". Upstream Online. 2010-11-26. Retrieved 2010-12-06.
  7. ^ "Azerbaijani President meets SOCAR management as Umid gas field commissioned in Caspian Sea". Trend News Agency. 2010-11-24. Retrieved 2010-12-06.
  8. ^ Akper Hasanov (2010-12-06). "Umid gas field to bring $45bn of net income, expert". News.az. Retrieved 2010-12-06.
  9. ^ "Umid Discovery Suggests Upside Potential To Reserves". Penn Energy. 2010-12-01. Retrieved 2010-12-06.
  10. ^ "Месторождение "Умид" увеличит газовый потенциал Азербайджана - президент". Azertaj. Retrieved 30 December 2015.
  11. ^ "President Ilham Aliyev speech (09.10.2012)". Government of Azerbaijan. Retrieved 30 December 2015.
  12. ^ "На морском газовом месторождении "Умид" сдана в эксплуатацию новая высокодебитная скважина (Бахрам Рустамбеков, В.Т.)". 1news.az. Retrieved 30 January 2014.
  13. ^ "bne intellnews, last updated in 21 December 2016". BNEIntellnews.
  14. ^ "Our Business, Nobel Oil". icpcredit.com. Retrieved 12 March 2018.
  15. ^ "About Nobel Upstream". icpcredit.com. Retrieved 12 March 2018.
  16. ^ "Azerbaijan's SOCAR issues tender for two Caspian Sea gas deposits". REUTERS. Retrieved 10 September 2015.
  17. ^ "SOCAR отказалась от бурения новых скважин на газоконденсатном месторождении Умид". ABC.az. Retrieved 9 October 2014.
  18. ^ "МЕСТОРОЖДЕНИE "УМИД" ОКАЗАЛСЯ SOCAR НЕ ПО СИЛАМ?". Haqqin.az. Retrieved 10 September 2014.
  19. ^ "SOCAR продолжает буровые работы на месторождении Умид". 1News.az. Retrieved 14 October 2015.
  20. ^ "SOCAR возобновляет бурение на месторождении Умид". Interfax. Retrieved 11 March 2015.
  21. ^ "SOCAR объявила тендер на совместную разработку газовых месторождений на Каспии". Caspian Oil & Gas. Retrieved 15 September 2014.
  22. ^ "Umid gas field to bring $45bn of net income, expert (by Akper Hasanov, 06 December 2010)". News.az. Retrieved 30 December 2015.
  23. ^ "SOCAR'S GAS EXPORT PRICE PLUNGES BY CUTTING DELIVERIES TO RUSSIA". Azerbaijan Centre for Oil Studies. Retrieved 21 January 2015.
  24. ^

    "In 2014, the price of 1000 cubic meters (cm) of exported gas by SOCAR was $166.89, while this figure in 2013 was $231.29, which marks an 28 percent increase."
  25. ^ http://new.socar.az/socar/en/company/joint-ventures/socar-umid-llc
  26. ^ "Construction of offshore platform on Umid saves SOCAR's $180m". News.az. Retrieved 7 January 2016.
  27. ^ Marshall, Steve (2013-01-31). "Statoil 'in talks for Azeri mega-project'". Upstream Online. NHST Media Group. Retrieved 2013-01-31.
  28. ^ "Azerbaijan: Umid gas reserves 2nd only to Shah Deniz". Yahoo Finance. 2010-11-24. Retrieved 2010-12-06.

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