Devon Energy Sees Potential in Azerbaijan

Article excerpt

The political tensions of recent months, coupled with several years of growing anti-American sentiment in the Middle East and Central Asia, have caused many U.S. companies to reconsider projects in those areas.
For example, Kerr-McGee, which once operated an office in Yemen, no longer has a presence in that country.
One exception (of sorts) to that trend is Devon Energy, which is continuing work as part of a multi-company partnership on projects in Azerbaijan, a former Soviet republic located by the Caspian Sea and in the same region as Iran, Iraq, Syria and Afghanistan.
Although the man on the street may assume that entire region of the world should be avoided, that isn't the case, according to David Sambrooks, vice president and general manager in charge of international operations for Oklahoma City-based Devon Energy.
He said Azerbaijan remains one nation that holds great potential for U.S. energy companies.
"Everything has been very stable for quite some time, and going forward, we see it to be the same," Sambrooks said. "As you know, after Sept. 11, that's been questioned in a lot of different areas."
He noted that Azerbaijan was one of the first countries in the region to throw its support behind the United States after the attack on the Pentagon and the World Trade Center.
"We think the post-9-11 outlook for Azerbaijan is even more positive," Sambrooks said.
In the early 1990s, the country was marred by constant strife and saw the fall of several governments, but relative stability has ensued in recent years.
Sambrooks said Azerbaijan, with a population consisting largely of Turkic Muslims, has not been struck with the anti- American sentiment that has made it difficult for U.S. oil companies to operate in other countries.
Even if the country weren't open to foreign investment, the area would still appeal to U.S. energy companies due to the presence of a "very, very large field" containing estimated reserves of more than 4 billion barrels. Production is already under way in Azerbaijan, yielding about 130,000 barrels a day. Sambrooks said the peak rate at the field would be over a million barrels per day.
"That will take some time before it gets to that," Sambrooks said. "The developments are going to take a number of years until they ramp up to those peak rates."
He said peak production is not expected until sometime in 2007 to 2010.
Azerbaijan borders the Caspian Sea on its eastern edge, but to the south, the country is bordered by Iran - one of the three points of President Bush's "axis of evil."
To the north, Russia and Georgia border Azerbaijan, and to the west lies Armenia.
While Azerbaijan's proximity to Iran hasn't deterred Devon officials, political realities have still impacted some activity related to the Azerbaijan field. …