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BP nears Socar Caspian exploration deal

UK supermajor and Azerbaijani state oil player looking to sign PSC on new block this year, report says

Azeri state energy company Socar plans to sign a production sharing agreement with BP to jointly explore prospects in a new block, D-230, in the North Absheron basin of the Caspian Sea before the end of 2017, a source at Socar told Reuters on Thursday.

BP and Socar signed a memorandum of understanding on joint exploration of this block in May 2016 in a move that reflected efforts by Socar and foreign companies to make new discoveries in the oil-rich country.

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"Participants of the deal will each have 50% of shares in the agreement," the source, who did not want to be named, told Reuters.

Block D-230 covers areas in a water depth of up to 300 metres, with a reservoir depth of 3000 to 5000 metres.

BP is a main investor and operator of two major projects in Azerbaijan - the Azeri-Chirag-Guneshli (ACG) oilfields, which account for most of Azerbaijan's output, and the Shah Deniz offshore gas field, which is estimated to contain 1.2 trillion to 1.5 trillion cubic metres of gas.