Nobel Upstream, an independent UK-based oil and gas exploration and production company has announced that it has entered into a Risk Service Agreement, and other necessary implementing agreements, with the State Oil Company of the Azerbaijan Republic (SOCAR) governing the exploration, appraisal and development of the giant scale Umid-Babek gas condensate field located in the Azerbaijan sector of the Caspian Sea.
The Risk Service Agreement, or RSA, was ratified by the Azerbaijan Milli Mejlis (parliament) and signed into law by the President of the Azerbaijan Republic on 2 May 2017. The RSA is an innovative structure and Azerbaijan’s first RSA in which SOCAR will play the key role. Most notably, the RSA retains the essential legal and commercial features of the successful production sharing agreements (PSA) entered into by major international oil companies, including the BP-operated ACG and Shah Deniz projects and the Total-operated Absheron development. Azerbaijan PSAs have served as models of stability and have ensured the protection of all shareholder rights while also providing robust financial returns to all stakeholders.
Nobel Upstream and SOCAR have established the Umid, Babek Exploration and Production company, which will serve as the contractor under the RSA. Nobel Upstream holds a twenty per cent (20%) interest in the company.
Larry Bates, CEO of Nobel Upstream commented: “We are pleased to have achieved this milestone together with our partner SOCAR and look forward to continuing the appraisal and development of the world-class Umid-Babek field, which will provide a stable and long-term gas supply for Azerbaijan and other European markets.”