PERSPECTIVES OF EXPLORATION AND PROSPECTING FOR OIL AND GAS IN AZERBAIJAN

 Today one of the vital problems humanity faces is to I meet energy demands around the globe, first of all I demands  in oil  and  gas.  According to publications of the world press requirements in oil only are estimated as 4 (four) billion tons and gas demands are about trillion cubic meters annually.

That is why scientists and explorers focus their atten­tion on the regions with vast hydrocarbon potential, which ultimately become major targets for exploration.

The Caspian Sea basin and neighboring territories of the regions are rich with oil and gas. Long-term explora­tion and prospecting as well as geophysical researches discovered a number of large fields with commercial oil and gas reserves. Some of those fields are on the territo­ry of Azerbaijan and the Caspian Sea's sector. Evaluations made by a team of Azerbaijani scientists under professor K. M. Kerimov's supervision gave the basis for statement on quite a huge recoverable hydrocarbon potential both onshore and offshore in Azerbaijan, which constitute quite a high figure. For example, if total recoverable oil and gas reserves (in oil equivalent) over the whole Caspian region are evaluated as 20 billion tons, reserves in Azerbaijan constitute almost 7-8 billion tons. It is really quite a huge potential.

However, sometimes these evaluations were not accepted mainly because some exploration which was  wells drilled within Azerbaijan sector of the Caspian sea did not finished by good result. Therefore, some oil companies attempted to form pessimistic attitude to further exploration in the region after failing to reach expected goals. Undoubtedly today it is time to give resolute and unambiguous answers to these crucial questions. In this respect I would like to underline that above mentioned figures are real and have reliable scientific basis. However some scientists and experts express standpoint that we should consider only proven hydrocarbon reserves, i.e. reserves, which were discovered through drilling. Of course their is  question such obvious truth, when we can definitely speak about oil and gas fields discovered by exploration well drilled in any area uncovers thick productive target.

Now in this point, I ask myself and my colleagues: if we are to wait for drilling results, when what are geo­physics and evaluation techniques for? It is another mat­ter, what are the perspectives of geophysics and those techniques in conditions of Azerbaijan, i.e. in the region with specific geologic-geochemical, geologic-morphologi­cal, geotectonic features and uplift zones. In my point of view, the major misapprehension arises when evalua­tion of hydrocarbon resources in any area uses conven­tional, commonly applied techniques instead of differential approach.

Considering all mentioned above aspects and latest geophysical data acquired in the region, we can state with confidence that the Republic's depths, including mainly Azerbaijani sector of the Caspian, bear huge amount of hydrocarbon in liquid and gaseous states. This is also clearly evidenced by investigations carried out by most petroleum companies operating here in Azerbaijan.

I would like to mention an independent point of view with similar recently estimations expounded by Russian analysts in newspaper "Izvestiya" published in Moscow (April 30, 2004; N 16(111), p.10).

I would like to emphasize another aspect as well. Most local and foreign experts consider reservoirs of so called "Svita Pereriva" as a major source of hydrocarbon. I certainly have no intention to deny potential enclosed in this unique suit, which indeed shows commercial oil-gas reserves in areas of South-Caspian megabasin. However, this fact may not be considered as a guideline and only the reliable. Gathered data evidence large oil and gas accumulations in other horizons of Productive Series (PS) buried in upper portion section (for example, in areas of Kurovdag-Neftchala uplifts zone - horizons I-VI of PS), in middle portion (in areas Karabagly-Kursangya- VII-XV horizons of PS) and in lower portion of PS (in areas Sangachal-more, Duvanny-more, Bahar, Karadag and other suites:NKP, KS, PK,KaS, etc.)- Indicated data dis­play that not only "Suite Pereriva" of Productive Series bears vast hydrocarbon potential, but Productive Series as a whole deserves attention in order to explore for new oil-gas bearing intervals. On the other hand, particular attention must be paid to exploration within sediments underlain PS. These are Paleogene-Miocene deposits, Upper Cretaceous and Paleocene. It should be noted that today oil workers and explorers have a large amount of data in their disposal, which certainly makes the basis for optimistic view.

In most cases exploration for oil and gas is related to anticlinal folds on the one hand and to hypsometric lev­els not more than 6000 meters on the other. Exceptions are areas within the Caspian Sea. For example, there is no well deeper than 5800 m on the land of Azerbaijan, including Kur depression, Absheron peninsula and neigh­boring territories where most large oil-gas accumulations are concentrated. The only exceptions are deep and ultra deep wells in Saatly.

I would like also to note another aspect. In my opinion there is some ignorance by our experts of world­wide experience, when for the last 4-5 decades emphasis while exploration works has been made on structural and stratigraphic traps in preference to anticlinal uplifts.

Namely such structures and numerous zones of thick sandy structures pinching out within sedimentary cover along north-east border of folded Small Caucasus and Talysh structures as well as regional pinching out zone (about 80-90 % of sedimentary cover deposits) along south-west slope of the Great Caucasus meganticlinorium are characteristic for depressions in the region. Zones of this kind are discovered also in central portions of depres­sion areas.

As the example we may indicate buried tectonic zone Gayidish discovered by our geophysicists on the basis of gravimagnetic data in eastern part of the West Caspian fault parallel to the Kur River stream. Analysis of evolu­tion history of this area and that of Kurovdag -Neftchala zone will leave no doubt in hydrocarbon prospects of Gayidish folding zone.

Similar investigations conducted in other regions of Republic also give basis for optimistic evaluation of oil-gas potential both onshore and offshore Azerbaijan. Therefore latest geologic-geophysical data leave no doubt in vast hydrocarbon potential in the Republic's depths. Successful realization of recovering of those vast resources, the problem facing our oilmen, requires significant expansion of regional and local in-field geophysical investigations. Namely in this case we may expect discovery of new deposit for commercial significant oil-gas bield , which are necessary for proper operation of major pipelines.

A JUSTIFIED OPTIMISM, OR IMPOSED PESSIMISM?!

 It is well known that now a days mankind demand for fuel-ener­gy resources and refining products is rapidly increasing. As a matter of fact, extensive development activity is currently evolved in mature and frontier area along with exploration for commercial hydrocarbon deposits.

In this respect Azerbaijan and adjacent South and Mid-Caspian sectors that yielded so far ten B tons of oil and some tens of  trillions m² of natural gases has drawn particular attention. This interest has significantly increased recently, when large-scale hydrocarbon findings as Guneshly-Chirag-Azeri and Shakh-deniz had been dis­covered in Caspian sector of Azerbaijan. Thanks to wise and perspica­cious strategy of Azerbaijan government an extensive investment flow has been provided into Republic economy and petroleum industry. As a result of quite tedious bilateral and multi-lateral nego­tiations with the largest international petroleum companies (USA, UK, France, Turkey, Russia, Italy etc.) confident in their successful business. More than 20  agreement which overall cost is over US 50B have been signed that permits exploration and development operations to be conducted both on- and dominantly offshore in Azerbaijan.

In order to secure the success of the projects under way and pro­vide its comprehensive development an "Oil strategy" of Azerbaijan has been elaborated under the leadership of the

President of Azerbaijan Republic Heydar Aliyev.

In this context we considered it important to re-evaluate hydro­carbon potential of the region as a whole and individual structures in particular taking into account results derived from available geo­logic/geophysical and remote sensing data along with improvements related to geologic setting and evolution history of earth crust dis­tinct blocks.

Conducted study enables us to conclude for sure that subsurface structures in Azerbaijan and its Caspian sector in particular contains wealth of hydrocarbon resources. Particularly, recoverable oil reserves have been estimated as much as 7-8 B tons and 10T m³ of gases.

Moreover, we have considered literally all criteria and calcula­tion parameters of the medium, including 3-D models for individual areas and uplifted belts, that is, all said above has been properly jus­tified and could not cause any reasonable doubts for anybody. Unfortunately, contractor companies conducted exploration for hydrocarbons in the framework of concluded contracts and agree­ments have not been very lucky hitherto to achieve expected results. In some cases encountered exploration targets appear to be insuffi­ciently saturated or even quite dry, that drive foreign petroleum companies staff to cheerless conclusion about exploration work extension within the license areas. Increasingly, some companies failed to achieve the goal have even conceived a wish to cease fur­ther exploration. What does it mean? Does it really mean the lack of reliable reserves or failure is associated with another reasons or even faults?

Prerequisite to solve the challenge was critical enough because there was a need for unequivocal and objective estimate of Baku-Tbilisi-Jayhan and Baku-Tbilisi-Erzrum main pipeline, construction and fur­ther exploration profitability, where project cost totals about US$3.5B. Both of them have a very crucial bearing to deliver oil and gas into the world market.

I am committed to note that proceeding from reliable potential of hydrocarbon resources in Azerbaijan has hitherto sufficiently sub­stantiated reserves and is a warrant for both pipeline project capaci­ty supply. Pledged oil delivery into the world market for the next 30 years can be presented as follows:

l) through Baku-Tbilisi-Jayhan- 1.5B tons;

2) through Baku-Supsa and Baku-Novorossiysk - 0.4-0.45B tons;

3 )to meet ever increasing domestic demand for the next 50 years - 0.4-05B tons.

In this case total yielded oil will amount to 2.3-2.4B tons, that is almost 2-3 times smaller than estimated total recoverable hydrocar­bon reserves. Similar situation is observed when analyzing actual state perti­nent to gas recovery and delivery to the world market. If annual gas production will achieve 50B m³ (including rele­vant offshore gas reserves) that is actually proven, then total yield­ed production for the next 50 years will amount min. about 2,5T m² that is about 3 times lesser than estimated recoverable reserves.

Azerbaijan will be able to cover entirely ever-increasing demand of gases and be sure to export about 2.0-2.5T m² of hydrocarbon gases.

However, in order to get some useful information about all these projects we consider it  as the necessary to extend geophysical survey and exploration works over the vast hydrocarbon potential areas.

To conclude mentioned above, it is noteworthy that nobody has and might not have any reasonable doubt about reliable hydrocarbon reserves and should not attempt arise pessimistic mood among population and for­eign petroleum companies and withdraw them from mutually bene­ficial cooperation and further financing investments into the oil industry in Azerbaijan.

Professor KERIM KERIMOV