A production sharing agreement covering exploration and development of the Alov, Araz and Sharg prospects in Azerbaijan’s sector of the Caspian was signed with the national government in July 1998.
This agreement covers an area of roughly 1,400 square kilometres, and ranks as Azerbaijan’s most extensive offshore licence so far.
The three prospects are located in 450-800 metres of water, with Alov itself lying about 120 kilometres south-east of the capital, Baku.
Technical evaluations of the acreage were made in 2002. However, drilling of a first exploration well is on hold pending talks between Iran and Azerbaijan about sector boundaries in this area.
