The Azerbaijani government has confirmed its commitment on RSC (Risk Service Contract) for the exploration and development of Umid field and prospective structure Babak in the Azerbaijani sector of the Caspian Sea.
By Decision #26 from 3 February 2017 the Cabinet Ministers confirmed the support and commitment of the government on this contract RSC, signed 12 January 2017 between the State Oil Company of Azerbaijan (SOCAR) with SOCAR Umid Oil & Gas Ltd.
The liabilities were determined on 30 January 2017. The decision on their confirmation entered into force from the time of its signing.
Earlier, SOCAR president Rovnag Abdullayev, announcing the contract, said that the Company would begin work on Caspian block Umid-Babak on Risk Service Contract in order then to raise the level this agreement up to Production Sharing Agreement (PSA) with the aim of attracting foreign investors.
"At the primary stage the Company will manage by its own force, and work will be fulfilled by its affiliated structure, but for development of those fields then it is necessary to attract financing, and the contract for the development will rise up to the level of PSA," he said.
He said that there is a long-term program of Umid-Babek fields’ development, under of which Umid will produce up to 5 bn cu m a year. As for Babek field, drilling will be carried out there in the future.
At that, Risk Service Contract on Umid-Babek fields will be presented to financial institutions and foreign companies, and interested parties will be able to join the financing of this project. Umid reserves are estimated at over 200 bn cu m of gas and 40 million tons of condensate.
Reserves of Babek good structure can reach up to 400 bn cu m of gas and 80 million tons of condensate.