French energy group Total SA (TOT) is close to signing a deal to develop an offshore oil and gas field in ex-Soviet Azerbaijan, a local news agency reported Wednesday.
Azerbaijani state energy company SOCAR and Total "have agreed to the main principles of an agreement on the Absheron offshore field," the Azer-Press news agency quoted Azerbaijani Energy Minister Natik Aliyev as saying.
The report didn't say when an agreement might be signed.
Total and U.S. energy firm Chevron (CVX) had previously signed a deal in 1997 to develop the Absheron field, estimated at the time to contain between 1 trillion and 3 trillion cubic meters of gas and nearly 120 million metric tons of oil. Chevron and Total abandoned the project in 2001 after determining it wasn't commercially viable.
Azerbaijan, a U.S.-friendly Muslim state wedged between Russia and Iran, is a key partner in a Western-backed corridor of oil and gas pipelines built in recent years to deliver Caspian energy resources to the West.
Western energy companies, led by U.K. energy giant BP PLC (BP), have invested heavily in the country's energy sector.
Boosted by soaring global energy prices, Azerbaijan's economy grew 25% in 2007, one of the highest rates of economic growth in the world. Inflation has also soared, however, and hit 16.7% last year.