Umid gas field

Umid
Country	Azerbaijan
Location/block	Umid-Babek
Offshore/onshore	Offshore
Operators	SOCAR
Field history
Discovery	November 24, 2010
Start of production	September 2012
Abandonment	NA
Production
Estimated gas in place	200×10^9 m3 (7.1×10^12 cu ft)

Umid gas field (Azerbaijani: Ümid qaz yatağı) is the second largest natural gas field in Azerbaijan. It is situated in the South Caspian Sea, off the coast of Azerbaijan, approximately 75 kilometres (47 mi) southeast of Baku, at a depth of 170 metres (560 ft). In translation from Azerbaijani, Umid means Hope.

History

Umid field is a part of a block previously consisting of Umid and Babek fields. The geophysical works at Umid started in 1953 which were repeated in 1972. A total of 9 wells were drilled in the area from 1977 to 1992, however no commercially viable fields were discovered at the time. In 2009, SOCAR financed the exploration works at Umid itself. This is the first time since the Contract of the Century that Azerbaijan conducted exploration works entirely on its own. The discovery of 200 bcm and 30-40 million tons of condensate (around 270-360mn bbl) initially forecasted by Khoshbakht Yusifzadeh was announced by SOCAR on November 24, 2010 after successful drilling at 6,500 metres (21,300 ft) on exploration platform Umid-1.

President Ilham Aliyev of Azerbaijan placed enormous hopes on the Umid gas field, remarking in 2010: "This field has a great future". In 2012 President Aliyev continued pinning great hopes on the competent development of the Umid gas block as part of overall major gas export strategy for Azerbaijan: "One of the wonderful events of recent months is that early gas has been produced from “Umid” field. This is a great indicator. The rate of the gas wells is very high. The first well has very encouraging figures. So “Umid” lives up to its name. The discovery of “Umid” by the State Oil Company of Azerbaijan is a historic event. The State Oil Company has managed to develop this large gas field on its own for the first time in recent years."

The joint venture of SOCAR with Nobel Oil Group drilled three wells in the Umid gas field since 2012. One well failed, while the other two produced decreasing amounts of natural gas: in 2012 – 1,500 thousand cubic meters of gas, 2013 – 638,000 cubic meters, and in 2014 - 630,000 cubic meters of gas per day. The plan was to drill a total of six wells producing one million to 1.5 million cubic meters of natural gas per day.

In October 2014 SOCAR and Nobel Oil Group decided to stop all drilling due to "technical problems in the production process", and announced a new international tender for a fresh foreign partner to lead the way and create a new strategy. As of January 2016, the tender has not been materialized. Since March 2015 SOCAR and Nobel Oil Group decided to drill a new appraisal well to get a better estimate of gas reserves in Umid, and hope that this drilling expense will be absorbed by the future foreign partner. According to the wishes of SOCAR and Nobel Oil Group the new foreign partner must have not only the skills and experience of deep-water offshore drilling, but also have available cash reserves.

According to expert determinations, the Umid ("Hope") gas field was too technologically challenging for the two companies developing it, despite spending some $5 billion USD already by 2010, and expecting, at the time of high gas prices, about $45 billion in net operating income. Since 2010 expenses have only increased whilst natural gas market prices have fallen.

Ownership

The gas field currently JV between SOCAR (80%) and Nobel Oil (20%) companies. The JV's founding capital was just 1,000 AZN.

It has been reported that Statoil was negotiating in 2013 to take a major role in developing a cluster of Umid, Babek, Zafar and Mashal fields.

Reserves

SOCAR leadership estimates that with further drilling, the overall reserves at Umid are likely to reach 300 bcm while those of Babek field lying under Umid will reach 600 bcm. Drilling at Babek will also be done by SOCAR. The Azerbaijan's total gas reserves are estimated at 3 to 5 trillion cubic meters (tcm). The discovery will boost Azerbaijan's potential as gas exporter to Western countries through the European evacuation route, i.e. Trans-Adriatic pipeline or Nabucco West pipeline.

See also

• Azeri-Chirag-Guneshli
• Shah Deniz gas field
• Shafag-Asiman
• Nakhichevan field