ExxonMobil to Develop Shale Oil and Gas Deposits in Azerbaijan
ExxonMobil and Azerbaijan's state energy company SOCAR have agreed to form a joint venture to explore and develop shale oil and gas resources in the Middle Kura Basin. The deal would let the American firm apply fracking expertise gained in the US to Azerbaijan's similar geology.
American energy giant ExxonMobil has reached an agreement with Azerbaijan's state oil and gas company SOCAR to establish a joint venture aimed at exploring and developing so-called unconventional hydrocarbon resources in the Middle Kura sedimentary basin, Bloomberg reported.
Under the deal, ExxonMobil would serve as the project's lead operator, pending approval from Azerbaijan's legislature. Negotiations between the two companies over commercial, legal and other terms lasted more than a year, according to the report, which notes that the Trump administration actively supported the agreement's conclusion.
Bringing fracking expertise abroad
ExxonMobil intends to bring to Azerbaijan the hydraulic fracturing, or fracking, expertise it developed in the Permian Basin and other American shale fields. The company hopes to apply these skills in countries with similar geological characteristics. However, the report notes that the legal and regulatory framework governing such drilling outside the United States is often considerably more complex, requiring lengthy negotiations and approvals before any work can begin.
ExxonMobil senior vice president Bart Cahir said the venture would combine SOCAR's knowledge of Azerbaijan with ExxonMobil's global experience and technology to better understand the basin's potential and pursue opportunities for safe and efficient development.
Over the past 15 years, shale development in the United States has been the world's largest source of new hydrocarbon supply. Exploiting these deposits has turned the US into the world's largest crude oil producer and a leading exporter of liquefied natural gas.
