LONDON (Reuters)–Azerbaijan advanced its ambitious plans for a leap in oil production on Tuesday by signing three multi-billion dollar deals with multinational companies.
The agreemen’s to develop its Caspian region oil riches were signed at a ceremony in London attended by British Prime Minister Tony Blair and Azeri President Haydar Aliyev–on a four-day official visit to Britain.
The ventures–furthering the country’s plans for foreign investment-led output expansion–involve combined investment of up to $13 billion if the most optimistic expectations are realized–according to officials.
Azerbaijan plans to boost petroleum output sixfold to over one million barrels per day by 2005 from 180,000 bpd currently.
Production had been failing for several years–but the country’s entire petroleum industry has been revitalized by a decision taken in 1995 to attract foreign investment and expertise.
Azerbaijan was one of the world’s great oil provinces with 51 percent of global supply coming from the region around Baku at the start of the century.
On the first of his three-day visit to London–Aliyev was reported by the electronic telegraph to have accused Russia of trying to ignite war in his country by pouring arms into Armenia–IRNA reported.
"The Russia’s have supplied more than $1 billion in weapons to Armenia," the Azeri president was quoted as saying. his government was said to be "very concerned" because it aggravated the situation in the Caucasus.
Aliyev suggested that the money to be made from Azeri oil would help secure western support against Armenia and the strong backing it receives from the US Congress.
The largest deal signed on Tuesday was between Azeri state oil firm SOCAR and an alliance of British Petroleum and Norway’s Statoil to develop the deepwater Sharg–Alov and Arzu field in the Abikh block.
Other signings included a production sharing agreement between Scotland’s Ramco Energy and SOCAR for the onshore Muradhanli–Jafarli and Zardab fields.
The agreement is for the fields’ rehabilitation–exploration and development and for further exploration within the 565 sq km contract area.
The statement said Ramco’s deal was one of the first production sharing agreemen’s to be signed for an onshore field in Azerbaijan. A Ramco feasibility study concluded that there were five billion barrels of oil in place.
Ramco was the first oil firm to establish a foothold in newly independent Azerbaijan and brokered the initial AIOC deal.
The ceremony also formalized an agreement for the offshore Inam oil field–already initialed with SOCAR by Britain’s Monument Oil and Gas US Amoco and Russia’s Central Fuel Company.