President Ilham Aliyev has approved a law on the adoption and approval of, and authorization to implement, the Agreement on the Exploration, Development and Production Sharing for the Area Covering Parts of the Quba, Qusar, Shabran, Siyazan and Khizi districts (Quba-Caspian), between the State Oil Company of the Republic of Azerbaijan (SOCAR), Gran Tierra Energy (Azerbaijan) GmbH and SOCAR Quba-Caspian LLC. The Milli Majlis (National Assembly) adopted the law on September 30.
Operative Information Center-OMM reports that the Production Sharing Agreement for an onshore prospective area in the Quba-Caspian region was signed on February 18 this year. The document was signed by the presidents of the two companies, Rovshan Najaf and Gary Guidry.
Under the agreement, Gran Tierra Energy Inc., which will serve as project operator, will hold a 65% participating interest. The geological exploration program includes collecting gravimetric data, conducting 3D seismic surveys and drilling exploration wells to assess the hydrocarbon potential of the contract area.
On June 10, the Cabinet of Ministers approved the Azerbaijani government’s guarantees and obligations related to the agreement, and the Milli Majlis ratified the document on September 30. The agreement names SOCAR’s subsidiary SOCAR Quba-Caspian LLC as the company representing SOCAR’s interests. The company was established on October 3 last year with authorized capital of 1,000 manats. Its legal representative is Elnur Aghataghiyev, son of Dovlat.
Once the law enters into force, the agreement, the government guarantee and the annexes will have the force of law. Unless the agreement specifies otherwise, for the duration of its validity, the agreement, the government guarantee and the annexes take precedence over provisions of any other existing or future laws, decrees or administrative orders of the Republic of Azerbaijan, or parts thereof, that are inconsistent with or contrary to them.
Once the law enters into force, all other rights and obligations that may have been granted under any previously concluded agreement, contract or other such document concerning any part of the contract area covered by the agreement will be terminated. The agreement’s participating parties will also be granted exclusive rights to conduct oil and gas operations in the contract area, in accordance with the terms of the agreement, the government guarantee and the annexes, for the entire period they remain in force.
After the law enters into force, the rights and interests acquired by the contractor parties, or their legal successors, under the agreement, the government guarantee and the annexes may not be changed, amended or reduced without the contractor parties’ prior consent.
All licences, customs permits, visas, other authorizations and sanctions necessary to fulfill the rights and obligations arising from the agreement will be granted to its participants.
Any additions, corrections or amendments to the agreement or its annexes may be made only with the written consent of the parties to the agreement and annexes, in accordance with the terms and provisions of the agreement.
