Alov, Araz and Sharg fields

=Overview=

The Alov, Araz and Sharg fields, known as 'Alborz' by the Iranians, cover an area of roughly 1,400 square kilometres, and according to Norwegian Statoil rank as Azerbaijan's most extensive offshore license as of 2012. The three fields are located in 450-800 metres of water. Alov lies around 120 kilometres south-east of Baku.

The deposit reportedly holds around 7 million barrels of oil and 400 billion cubic metres (bcm) of natural gas.

In Azerbaijani language, Alov means 'flare', Araz the name of a river in the south, and Sharg means 'east'.

=Development=

A production sharing agreement (PSA) for exploration and development of the fields was signed between SOCAR (40%), BP (15%), Statoil (15%), ExxonMobil (15%), TPAO (10%) and Alberta Energy (5%), in July 1998. THE 15-year contract may involve investment of US $9 billio for the whole complex, with $4 billion allocated to Alov.

Technical evaluations were carried out in 2002, however drilling of a first exploration well was on hold as of March 2013 pending resolution of disputes between Iran and Azerbaijan about sector boundaries in the area.

=Territorial dispute=

Given territorial disputes between Iran and Azerbaijan, the Iranian Oil Ministry made a public threat to cease dealing with any company that carried out prospecting in the area claimed by Iran. However Azerbaijani energy minister Natiq Aliyev commented that explorator work should go ahead.

=References=