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Wednesday, November 29, 2006

Exxon Mobil leaves Azerbaijan

27 November 2006 - Turan News - Exxon Mobil has informed SOCAR it will cancel Exxon Azerbaijan Operating Company on Dec. 19, 2006. The Baku office of Exxon Exploration and Production Azerbaijan Ltd will be canceled too. The Baku branches of Mobil Assent Investments Limited and Exxon Exploration and Production Caspian Sea Limited closed down on Nov. 22, 2006. Exxon Mobil joined Azerbaijan's oil and gas projects in 1995, but has not succeeded. It did not join the Century's Contract on time and then signed the following five contracts over oil exploration in Azerbaijan's Caspian Sea Sector: the Oguz Field - on Aug. 1, 1997 (50%), the Nakhchivan Field - on the same day (50%), Araz-Alov-Sharg - on July 21 (15%), Zafar-Mashal - on Apr. 1999 (30%), and Lerik Deniz - on the same day (30%). However, the Azerbaijani Parliament has never ratified Lerik Deniz, because the contractual area is argued between Azerbaijan and Iran, and this problem could only be solved by deciding about the Caspian Sea's status. Exxon Mobil decided not to participate in financing the Baku-Tbilisi-Ceyhan (BTC) project in 2002-2003, which was a mistake, because the company lost an opportunity of having its oil transported at preferential tariffs (the preference only regarding the BTC Co. shareholders). Then it had to sign a five-year contract with Azpetrol Holding to have its oil exported by the Baku-Batumi railway in Feb. 2005. Exxon Mobil had to stop the Oguz oilfield project in the Azerbaijani deepwater Caspian Sea area in Nov. 2003, because the drilling had not proved any profitable resources. The same happened in Nakhchivan and Zafar. The company had to pay considerable indemnities to SOCAR for the early cancellation of the projects. The Araz-Alov-Sharg project was also suspended in July 2001 because of the arguments between Azerbaijan and Iran. This problem also requires a decision about the Caspian Sea's status. Despite its unsuccessful oil exploration, Exxon Mobil has provided humanitarian aid to Azerbaijani internally displaced persons and has conducted considerable humanitarian projects in education (published mini encyclopedias in Azeri).

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