French utility giant GdF Suez (GSZ.FR) said Thursday it has acquired a 15% stake in an offshore exploration-production license in Azerbaijan.
The D-222 license is 65%-owned by Russian oil group Lukoil Holdings (LKOH.RS) Lukoil Overseas unit and is 20%-owned by the national Azeri company SOCAR.
The license contains the Yalama prospect, which will be drilled by early-2009.
Gdf Suez added that Lukoil and SOCAR signed the exploration, development and production-sharing contract on Block D-222 on July 3, 1997 and the exploration period will continue until late 2011.
If the exploration phase is successful, the license operation will enable GdF Suez to increase its reserves by approximately 35 million barrels of oil equivalent.
Azerbaijan owns large hydrocarbon reserves, estimated at over 11 billion barrels of oil equivalent and more than 1.2 trillion cubic meters of natural gas, notably thanks to the Shah Deniz field.
The acquisition thus perfectly fits the Group's strategy to strongly increase proven and probable reserves. These are expected to rise in the medium term from 670 million barrels of oil equivalent to 1.5 billion barrels of oil equivalent, GdF Suez said.
To achieve this, the group will expand the geographic horizon of its exploration-production activities, currently focused on Europe and Africa.