Canada-based Gran Tierra Energy has entered into an agreement with the State Oil Company of the Republic of Azerbaijan (SOCAR) to explore and develop oil and natural gas in Azerbaijan’s Guba-Khazaryani region.
This exploration, development and production sharing agreement (EDPSA) is pending legislative approval and other legal requirements in Azerbaijan.
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The agreement, signed through an indirect fully owned subsidiary, grants significant rights to Gran Tierra in an onshore petroleum area known for substantial oil and gas fields.
The contract area in the Guba-Khazaryani region surrounds a nearly 65km-long structure that has produced more than 100 million barrels of oil and in excess of 200 billion cubic feet of natural gas.
Gran Tierra will hold a 65% working interest and be the operator of this contract area. The concession spans approximately 400,000 acres, more than twice the size of the company’s holdings in Ecuador.
The EDPSA includes a five-year exploration and appraisal phase, followed by 25 years for development if economically viable discoveries are made. There is also an option to extend development by another five years.
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By GlobalDataThe exploration phase is divided into two parts. Initially, a three-year period will involve conducting a gravity study, drilling two wells and acquiring 250km² of 3D seismic data.
A subsequent two-year phase requires the drilling of two additional wells and acquiring another 250km² of seismic data if pursued.
Gran Tierra plans to start an airborne gravity study this year, with seismic surveys and drilling scheduled for 2027. These activities are set to be financed through net cash from the company’s operating activities.
Gran Tierra president and CEO Gary Guidry said: “Azerbaijan is a deeply established hydrocarbon province with major discoveries and a world-class, export-ready infrastructure system, supported by more than a century of oil and gas production history, including some of the world’s earliest and most prolific commercial oil developments.
“This aligns well with our strategy of pursuing risk-mitigated, capital-efficient growth in regions with demonstrated upside. Importantly, Azerbaijan plays a critical role in European energy security, supplying both oil and gas to key European markets, and we are excited about the opportunity to participate in that value chain over the long term.”
In November 2024, Gran Tierra announced an oil discovery in Ecuador, the company’s seventh successful find in the Arawana/Zabaleta field area.
