Azerbaijan's parliament has swiftly ratified a January agreement between the Baku and Turkmenistan governments to proceed with joint exploration and development of the Dostluk offshore block in the Caspian Sea.

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At a session of the parliament — known locally as Milli Medzhilis — held on Tuesday in the Azeri capital Baku, its members were told that Turkmenistan will have rights to about 70% of the expected hydrocarbons output, with the remaining production set to go to Azerbaijan.

The signing of the memorandum on Dostluk has attracted attention from Russian privately held oil producer Lukoil, which is looking to increase its exposure to offshore Caspian plays.

Chief executive Vagit Alekperov travelled to the Turkmen capital of Ashgabat to meet with country’s President Gurbanguly Berdymukhamedov at the end of the last week.

According to a Turkmen governmental statement, Berdymukhamedov has expressed readiness to consider “investment options” that Lukoil may offer to the government to participate in the project.

Lukoil said that it already has extensive offshore experience in the Caspian Sea where it operates several oil and gas fields in the Russian sector and explores new acreage in the Kazakh sector of the sea.

The Russian company also has strong ties to Azerbaijan as Alekperov was born in a village near Baku and graduated from the Azizbekov oil and chemistry institute in the country’s capital.

Baku-based news agency Trend has quoted Turkey’s Minister For Foreign Affairs Mevlut Cavusoglu as welcoming the Dostluk agreement and saying that the country will be ready to transport oil and gas from Turkmenistan to Turkey and then on to Europe.

Earlier, the ministry said in a statement that the Dostluk project “will enhance the energy security of Turkey and the rest of Europe”.

Dostluk — translated as “friendship” in both Turkmen and Azeri languages — is a new name that both countries had given to a Caspian deep-water block previously known as Serdar in Turkmenistan and Kyapaz in Azerbaijan.

The block — which has been a bone of contention since the break-up of the Soviet Union in 1991 — is located near the border between the Caspian maritime sectors of the two countries.

Possible in-place resources of the tract are estimated at about 370 million barrels of oil and some natural gas, however, both countries agree that the acreage needs significant exploration before commercial production can start.