LUKOIL SUBMITTED OFFERS ON REHABILITATION OF GOVSANI-ZIKH BLOCK

The LUKoil Company submitted a number of new offers to the State Oil Company of the Azerbaijani Republic (SOCAR) on rehabilitation of a block of onshore fields Govsani-Zikh, Director of Baku officel of LUKoil Overseas Rim Bagmanov reported to AzerTaj.

Under the circumstances, implementation of this project is impossible for LUKoil at the moment, because the company, as well as any other company, foresees to get profits, first of all, Director General said.

Our offers presuppose that the both parties could efficiently participate in this project. Concerning increase of LUKoil’s shares in the project, this option is being discussed as one of the possible means of raising efficiency of the project.

It should be reminded that due to non-settled issues, connected to environment protection and ecology, Govsani-Zikh project still remains unimplemented. According to estimations of Russian company’s experts, LUKoil is to spend $100 million to fulfillment of ecological obligations only. Such investments to only ecology may decrease profitability of the project, the total cost of which comes to 250 million dollars, down to a zero level.

SOCAR and LUKoil own 50 percent of shares each in this project. The contract area comes to 128 sq. km and the volumes of residual oil reserves are estimated as 20 million tons.