Azerbaijan Approves Joint Development of the Guba-Khazaryani Onshore Oil and Gas Area

en.Wedoany.com Reported - On October 5, Azerbaijan's National Assembly approved the production sharing agreement for exploration, development, and production in the Guba-Khazaryani onshore area, signed by Gran Tierra Energy and the State Oil Company of Azerbaijan Republic (SOCAR) on February 18. Upon the agreement's entry into force, Gran Tierra will hold a 65% working interest and serve as operator, while SOCAR will hold 35%. The contract area is located in the onshore region of northern Azerbaijan, covering parts of the Quba, Qusar, Shabran, Siyazan, and Khizi districts.

Gran Tierra has simultaneously completed an airborne digital full tensor gravity gradiometry survey over the contract area, conducting a total of 102 flight lines with a total flight length of 5,775 line-kilometers, covering an area of approximately 4,815 square kilometers. This work is used to characterize the geometry of sedimentary basins and fault-related structures, and to identify areas that may form oil and gas traps. The airborne gravity data will be integrated with existing 2D seismic data, historical exploration well data, and regional geological data to screen the scope for the next phase of 3D seismic acquisition and the locations of exploration and appraisal wells.

The first-phase exploration work of the project includes airborne gravity data acquisition, 3D seismic acquisition, and exploration well drilling. According to the work arrangements previously disclosed by both parties, the first 3-year exploration phase plans to complete approximately 250 square kilometers of 3D seismic and drill 2 exploration wells; if it enters the subsequent 2-year phase, it will continue to implement approximately 250 square kilometers of 3D seismic and another 2 wells. When SOCAR and Gran Tierra signed the contract in February, they had already listed airborne gravity, 3D seismic, and exploration drilling as core work contents.

The Guba-Khazaryani contract area is centered on an oil and gas-bearing structural belt approximately 65 kilometers long in northern Azerbaijan, an area with a long history of oil and gas exploration and production. Gran Tierra plans to use the results of this round of airborne gravity to re-identify deep structures and fault systems, and to combine existing well data to assess under-evaluated traps, based on which the subsequent 3D seismic and first batch of well locations will be determined. The project has not yet announced additional capital expenditure, drilling budget, or production targets.

Under the production sharing agreement, Gran Tierra assumes the role of operator, responsible for the exploration plan, data acquisition, well location design, and subsequent drilling implementation; SOCAR, as a partner, participates in project interests and contract management. With the completion of this parliamentary approval, the project has moved from the agreement signing stage to the formal exploration implementation stage. Gran Tierra will next complete the interpretation of the airborne gravity data and, based on that, deploy 3D seismic acquisition and the first batch of drilling targets.

Gran Tierra is simultaneously adjusting its global asset portfolio. The company has disclosed that after completing the previously announced sale of its assets in Colombia and Ecuador, its business focus will concentrate on Canada and Azerbaijan, and Guba-Khazaryani will become one of the core exploration projects of its upstream business in Azerbaijan.