Assuming cut off value: 50 mmbo (100%) above base line production(arbitrary volume set for country entry.Fields with already >50% recovery discarded.

1. IOR / EOR screening of
Azerbaijan

2. Time
Productionrate
Farm-in
Base line production
Possible Farm-in opportunity into
existing field
Contract Type: Rehabilitation PSA
Farm-in continues to produce field
on base line production
OPEX recovered from production
income

3. Time
Productionrate
Farm-in
Improved Oil Recovery
Base line production
Improved Oil Recovery Phase
• Mainly acceleration of
production by workover, infill
drilling, de-bottlenecking, etc.
• CAPEX/OPEX recovered from
proceeds above baseline
production
Remainder shared acc. PSA

4. Time
Productionrate
Farm-in
Enhanced Oil Recovery
Base line production
Enhanced Oil Recovery Phase
 Additional recovery by
gas / heat / chemicals
injection
 CAPEX/OPEX recovered
from proceeds above
baseline production
Remainder shared acc.
PSA

5. Time
Productionrate
Farm-in
Base line production
Field Abandonment
 P&A of wells, removal of
facilities, pipes etc.,
environmental clean-up

6. Project categories:
What is doable for
Western partner
Company? • doable:
– Geological setting:
favourable no. of layers & compartments
– Rather low Recovery Factor:
sufficient potential for improvement
– Manageable for Westerns partner
company:
technology, manpower
– Environmental risks (mainly before farm-in)
controllable
• not doable:
– Too many layers / compartments
– Current recovery factor very high:
only small improvement at high cost
– Too large for any western partner Company
to handle:
1000s of wells, too large local organisation
– Uncontrollable environmental risks:
e. g. high surface contamination
doable
too small
doable
large enough
not doable
(too) large
not doable
small
doability
noyes
small large
materiality
cutoff
doable
too small
doable
large enough
not doable
(too) large
not doable
small
doability
noyes
small large
materiality
cutoff
12
34

7. Project categories:
• Assuming cut off value: 50
mmbo (100%) above base line
production
(arbitrary volume set for country
entry)
• Required OOIP:
@ 10% increase of RF: 500 mmbo
@ 20% increase of RF: 250 mmbo
@ 25% increase of RF: 200 mmbo
doable
too small
doable
large enough
not doable
(too) large
not doable
small
doability
noyes
small large
materiality
cutoff
doable
too small
doable
large enough
not doable
(too) large
not doable
small
doability
noyes
small large
materiality
cutoff
12
34

8. Assumptions
• 50% recovery factor is achievable
• Fields with already >50% recovery to be discarded:
additional increase too expensive
• The “old giants” to be discarded:
- too many wells (huge manpower/time effort for field
modelling)
- long production history (?data documentation)
- wells (at least for a large part) very old (technical state)

9. Screening Method
1. Discard small fields: OOIP < 100 mmbo
2. Discard fields below cutoff: 0.5 * OOIP – PP >= 50 mmbo
3. Discard “old giants”
Uncertainties:
• Accuracy of volumes
• Applicability of IOR/EOR
• Efficiency of IOR/EOR
• Access to some fields
Oil
originally
in place
PP
reserves
IOR
EOR
50% of OOIP

10. First run: Reserves Figures different public source
give OOIP: taken from IHS
Two fields out of 33 reported by public and research source fit the criteria.
field name Current operators
Oil In Place
(IHS source)
MMbbl
PP
reserves
public
source
MMBBL
PP vs
OIIP (%)
Remaining
up to cut
off @ 50%
IOR/EOR
potential to
cutoff MMbbl
Producti
on start remarks
Bibiheibat NOC 2,300.20 1,208.70 53 -3% above cutoff 1873 "old giant"3996 wells
Surakhany NOC 1,512.00 899.1 59 -9% above cutoff 1904 "oil giant" 2463 wells
Gala NOC 875 486.7 6 -6% above cutoff 1932 1500 wells
Kharachuhur Karachukhur OC 498.2 309.2 62 -12% above cutoff 1928 1056 wells
Balakhani Sabunchi
Ramani Balakhani OC 5,226.00 1,996.30 38 12% 235.6 1871
3"old giants"all
together 11450 wells
Kurovdag Shirvan oil JV 1,375.00 294.3 21 29% 84.2 1955 1151 wells
Kursangi Salyan oil JV 985.8 182.4 19 31% 57.5 1962
Siazan Monocline NOC 653 125.6 19 31% 38.6 1941
Neftchala
KhylliGushkhana AnshadPetrol JV 626.9 116 19 31% 36.5 1937-78
Lokbatan Puta
Gushkhana NOC 850 332.7 39 11% 36.1 1927
Ramana (JV area) Azgernoil JV 507.5 152.3 30 20% 30.5 1871
no OOIP available,
assumed 30%
recovery
Binagadi Gyrmaki
Chahnaglar
Sulutepe Masazyr
Fatmai Global Energy OC 955 421.8 44 6% 24.6 1896-1980
group of 6
fields(=smaller
figuers per field)
Karagabli Salyan oil OC 685 58.2 8 42% 24.2 1960
Shabandag
Shubany Yasamal
Ateshgah NOC 344 92.5 27 23% 21.4 1908
group of 4
fields)=smaller
figures per field)
Zygh Global Energy OC 338.4 101.5 30 20% 20.3 1935
no OOIP available
assumed 30%
recovery
Hovsan Global Energy OC 353 50.9 14 36% 18.1 1948
Buzovna Mashtaga Buzovan Mashtaga OC 578 249.4 43 7% 17.1 1940
Umbaki NOC 233 39.5 17 33% 13 1951
Mishovdag Karasu OC with Global Energy 366 165.6 45 5% 7.9 1956
Kalamadin Karasu OC with Global Energy 129.5 38.9 30 20% 7.8 1980
no OOIP available
assumed 30%
recovery
Zira NOC 51.2 15.4 30 20% 3.1 1956
no OOIP available
assumed 30%
recovery
Naftalan NOC 257.9 0.8 0 50% 0.4 1950

11. Second run: IHS OOIP/Reserves
Figures
Two fields out of 82 fields and discoveries reported by IHS fit the criteria.
field name
Current
operators
Oil In
Place (IHS
source)
MMbbl
PP
reserves
(IHS
source)
MMBBL
PP vs
OIIP (%)
Remaining
up to cut
off @ 50%
IOR/EOR
potential to
cutoff MMbbl
Producti
on start
remarks
Bibiheibat NOC 2,300.20 1,208.70 52 -2% 1873 "old giant"3996 wells
Surakhany NOC 1,512.00 899.1 57 -7% 1907 "oil giant" 2463 wells
Gala NOC 875 486.7 55 -5% 1932 1500 wells
Binagadi Global Energy OC 499 53 -3% 1896 2863 wells
Kharachuhur Karachukhur OC 498.2 309.2 56 -6% 1927 1056 wells
Chakhnaglyar Global Energy OC 131 55 -5% 1932
Kurovdag Shirvan oil JV 1,375.00 458 33 17% 76.4 1956 1151 wells
Kursangi Salyan oil OC 985.8 267.1 27 23% 61.2 1963
Karagabli Salyan oil OC 685 136 20 30% 41.0 1960
Siazan
Monocline
NOC 653 128.3 20 30% 38.9 1941
Neftchala Khylli
Gushkhana
AnshadPetrol JV 598 114 19 31% 35.3 1931
Lokbatan Puta
Gushkhana
NOC 850 350.7 41 9% 30.6 1927 group of 3 fields
Shabandag
Shubany Yasamal
Ateshgah
NOC 344 104 30 20% 20.6 1920 group of 4 fields
Balakhani
Sabunchi Ramani
Balakhani OC 5,226.00 2,572.00 49 1% 20.2 1871
3"old giants"all
together 11450 wells
Naftalan NOC 257.9 49.1 19 31% 15.2 1873
Hovsan Global Energy OC 353 141 40 10% 14.2 1952
Umbaki NOC 233 40.3 17 33% 13.2 1951
Sulutepe AzEn oil OC 245 85 35 15% 13.0 1920
Mishovdag Karasu OC with Global Energy366 154 42 8% 12.2 1958
Buzovna
Mashtaga
Buzovan Mashtaga OC 578 263 46 4% 11.8 1941
Kalamadin Karasu OC with Global Energy134.1 40.2 30 20% 8.0 1979
no OOIP available
assumed 30%
recovery
Karadag NOC 114.5 34.4 30 20% 6.9 1946
no OOIP available
assumed 30%
recovery
Zygh Global Energy OC 233 104 45 5% 5.6 1937

12. Kurovdag: Basic Information
- Infill drilling and workover
- Massive water flood program
- Multi-layer, compartments and overpressure
Onstream Onshore
Location Timetable
Azerbaijan Onshore, Lower Kura Trough Discovery Date 1955
Block: Kurovdag, Area: 115 km² Production Started 1957
Producing Horizons: 14 zones Peak Oil Production (41,310 b/d) 1965
Apsheronian Issue Date Sep-1997
Akchagylian Final Expiry Sep-2027
Productive Series
Depth range: 600 - >4,300 m Cumulative Production (31.12.2006) 259.2 mmbo
Number of wells 1370 Remaining 2P Reserves (01.01.2009) 40 mmbo
active on 01.03.2006 337
average flow rate 15 bopd
water cut ~85%
Operator Participants %
JV Shirvanoil Ltd Global Investment Energy (since Jan 2008) 51
SOCAR 49

13. Kurovdag: Maps & Sections (IHS)

14. Kursanga: Basic Information
- Rehabilitation of 250-350 wells, 50 new wells
- Pre-1999: water injection programme failed due to overpressure
- Multi-layer, compartments and overpressure
Onstream Onshore
Location Timetable
Azerbaijan Onshore, Lower Kura Trough Discovery Date 1961
Block: Kursanga-Garabagly, Area: 450 km² Production Started 1962
Producing Horizons: ~14 zones Peak Oil Production (9,280 b/d) 1970
Apsheronian Issue Date Apr-1999
Akchagylian Final Expiry Apr-2029
Productive Series
Fault blocks in field: >24
Depth range: 2,100 - 4,800 m Cumulative Production (31.12.2006) 77.6 mmbo
Number of wells 768 Remaining 2P Reserves (01.01.2009) 70 mmbo
active on 06.2008 173
Operator Participants %
Salyan Oil Ltd SOCAR 50
CNPC (Hong Kong) (since 2002) 25
CNPC (since 2002) 12.5
PetroChina (since 2006) 12.5

15. Kursanga: Maps & Sections (IHS)