* Memorandum to be signed on Wednesday - source
* Commercial negotiations to follow
* Nakhichevan deposit could contain up to 300 bcm of gas
(Adds comment from RWE CEO)
By Lada Yevgrashina
BAKU, March 9 Azeri state energy firm SOCAR and
German utility RWE (RWEG.DE) intend to sign a memorandum of
understanding on Wednesday to explore the Nakhichevan gas and
oil deposit in the Caspian Sea, a SOCAR official said.
Commercial negotiations will follow the signing of the
memorandum, the official told Reuters on Tuesday. He declined to
be identified or to disclose further details of the deal.
The chief executive of RWE, Jurgen Grossmann, said late on
Monday he would fly to Azerbaijan on Tuesday to sign a gas
exploration contract. [ID:nLDE6241WB]
RWE leads a consortium of planning to build the 31 billion
cubic metre capacity Nabucco pipeline to bring Caspian gas to
Europe, but needs to secure gas to fill it in the face of stiff
competition for Central Asian gas from China and Russia.
"In the wake of Nabucco, our exploration and production
company DEA is being granted exploration and production licenses
for some fields both in Azerbaijan and Turkmenistan," he told
reporters on Monday night.
The Nakhichevan deposit is located 90 km (55 miles) south of
the Azeri capital, Baku, at a depth of 400-600 metres below the
surface of the Caspian Sea. It was first discovered by Azeri oil
explorers in 1960 and prepared for drilling as recently as 1994.
ExxonMobil (XOM.N) expressed interest in the deposit in 1997
and signed a contract with SOCAR at the time, but declined to
continue exploration, citing the absence of significant reserves
at the field.
According to preliminary government estimates, Nakhichevan
may contain up to 300 billion cubic metres of gas.
RWE is one of the shareholders in the planned Nabucco
pipeline, aimed at transporting Caspian and Central Asian gas
via Turkey and the Balkans to Europe.
(Additional reporting by Daniel Fineren in London; Writing by
Margarita Antidze in Tbilisi; Editing by Jon Boyle)