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BAKU, May 25 (Reuters) - BP and Azerbaijan's stateoil company SOCAR announced on Wednesday they had signed amemorandum of understanding (MoU) to jointly explore prospectsin a new block, D230, in the North Absheron basin of the CaspianSea.
The move reflects efforts by SOCAR and foreign companies tomake new discoveries in the oil-rich country.
BP said that as a part of the government's plan to ensureall of Azerbaijan's offshore waters are fully explored, the MoUgives BP the exclusive right to negotiate an agreement withSOCAR to explore and develop block D230.
Block D230 covers areas in a water depth of up to 300metres, with a reservoir depth of 3,000-5,000 metres.
SOCAR President Rovnag Abdullayev told reporters the finalagreement was expected to be signed this autumn.
BP is a main investor and operator of two major projects inAzerbaijan - the Azeri-Chirag-Guneshli (ACG) oilfields, whichaccount for most of Azerbaijan's output, and the Shah Denizoffshore gas field, which is estimated to contain 1.2-1.5trillion cubic metres of gas.
Shah Deniz I has been pumping gas since 2006, while gas fromits second stage is expected to reach Europe by 2019-2020.
BP's regional head told Reuters in March it expected flatoil production in 2016 at its ACG oilfields, where outputtotalled 31.3 million tonnes last year, down slightly from 31.5million tonnes in 2014.
No other major contracts have been signed in Azerbaijansince these major projects were sealed in Baku, although manyother foreign companies are involved in exploration in theex-Soviet country.
Among the most prized prospects are two gas deposits in theCaspian Sea - Umid and Babek - with total preliminary reservesof about 600 bcm of gas.
Azerbaijan plans to produce 41 million tonnes of oil and 29bcm of gas in 2016. It produced 41.7 million tonnes of oil and29.7 bcm of gas in 2015. (Reporting by Ron Bousso and Margarita Antidze; Writing byMargarita Antidze; Editing by Mark Potter)