Oil major TOTAL S.A. (TOT) has made an important gas discovery in the Caspian Sea in the Absheron block offshore Azerbaijan. The company expects this discovery to be significant in terms of resources.
Located at a depth of 1640 feet of water, 62 miles south east of Baku and 15 miles north east of the Shah Deniz gas and condensate field, the Absheron X-2 well discovered more than 500 feet of cumulated net gas pays. The well is currently drilled to a depth of 21,489 feet.
The gas reserves were discovered within high quality sands on the northern flank of a major 104-square mile area. The company expects the reservoir to extend over the entire northern part of the structure.
The initial well results confirm a potential of several trillion cubic feet of gas and associated condensates. The company said drilling will continue to explore deeper that looks promising. The well will then be tested to better confirm the reservoir potential.
TOTAL’s subsidiary, Total EP Absheron is the operator of the Absheron license with a 40% equity interest. Other partners in the block include SOCAR (40%) and GDF SUEZ (20%).
The Absheron discovery is the result of TOTAL’s bolder exploration strategy aimed at exploring high risk/high reward prospects both in prolific and frontier basins particularly in high pressure, deeply buried reservoirs. Going forward, the company expects to make similar discoveries in the United Kingdom, Brunei, Malaysia and Egypt, where the company has received new permits recently.
TOTAL is present in Azerbaijan since 1996. The company’s equity production in the country reached 13,000 barrels equivalent of oil per day in 2010 from the Shah Deniz field where TOTAL holds a 10% share.
France-based TOTAL is one of the largest publicly traded, globally integrated oil and gas companies based on production volumes, proved reserves and market capitalization. The company has exploration and production operations across five continents.
TOTAL S.A. currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. The company competes directly with BP Plc (BP).
