SOCAR, Total reach agreement in principle to use new platform

The source said that the sides have made progress in the negotiations on this issue over the past time.

"The parties are in the way to sign a contract that can happen until the completion of the rig’s construction,” noted the source.

Construction of the first new generation drilling rig for SOCAR started in 2013. It is expected that the construction will be completed in late 2016. The new rig is designed for drilling of wells with a depth of up to 8,000 meters at a sea depth of 1,000 meters.

The cost of the new generation floating drilling rig construction project is nearly $1.12 billion. The State Oil Fund of Azerbaijan (SOFAZ) has allocated $770.1 million for the project since the beginning of the rig’s construction.

The first volumes of gas from Absheron gas and condensate field is expected to be received in late 2021 and early 2022, according to the forecasts. The final investment decision on the project will be adopted in the fourth quarter of 2017, while the first well at the field is expected to be drilled in the third quarter of 2019.

The discovery of Absheron field was announced in 2011. The reserve of Absheron field is estimated at 350 billion cubic meters of gas and 45 million tons of condensate, according to SOCAR geologists.

Shareholders of Absheron project are: SOCAR - 40 percent, Total - 40 percent and Engie - 20 percent.