BAKU (Novoye Vremya)–Preliminary drilling of the "Karabakh" Azeri oil well was unsuccessful in producing oil. Russian journalist Maxim Greenberg–reported in the Nezavisimia Gazeta–that this was Azerbaijan’s first major failure in meeting the conditions of the Baku oil consortium deals.
The 3840 meter deep test drilling of the "Karabakh" oil well–the article stated–began on Oct. 6 and lasted until the end of November. In fact–instead of oil–the drilling produced remnants of natural gas. The findings–or lack thereof–were reported to the Azerbaijan International Oil Consortium. Deemed unproductive–the scheduled 4200 meter drilling was halted before completion.
With current conditions–it is not even possible to assess correctly whether there are natural gas deposits. AIOC said that a statement regarding natural gas deposits can only be made after a second round of drilling–scheduled to begin in April-May of 1998. The location of the drilling was expected to be determined by members of the Consortium at its Dec. 18 Milan meeting.
AIOC stated that the State Oil Company of the Azerbaijan Republic views positively this recent discovery of natural gas–even though the AIOC agreement was reached solely with regards to oil. The agreement has to be altered in order to incorporate details on natural gas export.
The article’s author noted that if oil is not discovered–and if natural gas exports are not deemed profitable–not only will the future of the "Karabakh" oil well be doomed but also that of Azerbaijan’s potential as an oil-producing entity.
Due to the shortcoming of the "Karabakh" oil well–it is possible for other oil consortia which hold agreemen’s with Azerbaijan–based on the assumption that Azeri wells contain oil–to place holds on their agreemen’s until further assurance of the existence of oil is obtained.
Even if other consortia do not acknowledge "Karabakh’s" failure to produce oil–Azerbaijan still faces grave losses.