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BP team agrees terms on Azerbaijan oil deal

Hugh Pope
Monday 01 November 1993 19:02 EST
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ISTANBUL - A BP-led Western oil consortium has agreed terms with the new pro-Russian government in Azerbaijan on the exploitation of the important Azeri and Chirag fields in the Caspian Sea, writes Hugh Pope.

The consortium may also have a role to play in Guneshli, a third offshore field already in production, which had been included in negotiations with the more pro-Western government ousted in June.

The agreement, signed on 24 October, will allay fears that the new government of Gaidar Aliev intended to derail negotiations in progress for more than three years with the consortium, in which BP's alliance with Statoil, the Norwegian state oil company, holds a 36.7 per cent stake.

Azerbaijan's state oil company, Socar, may make a separate agreement on Guneshli with the American Chevron corporation and Russia-based Luke Oil.

The consortium will pay dollars 250m ( pounds 168m) when the deal is ratified by the Azerbaijani parliament and government, and a further dollars 250m when the question of an export pipeline is resolved, BP said.

Chirag and Azeri are estimated to contain 3 billion barrels of oil, while Guneshli has at least 1 billion more.

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