 The Exploration, Production and Oil & Gas Investment in the
Former Soviet Union, including Armenia, Belarus, Georgia, Kyrgyzstan,
Moldova, Tajikistan, Uzbekistan and the Baltic States
Armenia is located in southern Transcaucasia (Figure 1.1) and covers
a land area of approximately 30,000 square kilometers, roughly equal
to the states of Maryland and Delaware, combined. It faces Azerbaijan
to the northeast, south and east, Iran to the southeast, Turkey
to the west, and Georgia to the northwest. The northeast and south
are mountainous and nonprospective for oil and gas. The small Ararat
Oblast, or Ararat Depression, in western Armenia has some hydrocarbon
potential. Yerevan is Armenia's capital and principal city.
This report provides an overview of the limited, speculative oil
and gas resources of Armenia. The primary focus of the report has
been to delineate the geologic features of the study area and to
determine how these factors relate to hydrocarbon favorability.
Those features include tectonic history, structure, stratigraphy
and resource potential. There has never been any significant production
of oil and gas from Armenia.
Exploration for oil and gas began in Armenia in 1948, but geologic
and geophysical efforts there have long been focused on metals and
water, not petroleum. About 2,000 kilometers of modern seismic data
have been acquired and over 300 wells have been drilled. Evaluation
of these data will be made in 1992 and 1993 by California's Energy
Commission, State Lands Commission and Department of Conservation,
under a grant from the U.S. Trade and Development Program (TDP).
A preliminary evaluation of these data suggests as much as 700 million
barrels of oil and an unquantified volume of shallow gas may have
been discovered by the Armenians but hidden from the Russians for
political reasons under the Soviet regime. These resources must
be considered completely speculative (at best) at this time.
Armenia is located in the Lesser Caucasus Mountain Range, a portion
of the Alpine fold belt. Structural conditions in the Ararat Oblast
may be appropriate for oil and gas accumulation, but detailed structural
maps, cross-sections and seismic data are not currently available.
This type of material is expected to be made public as part of the
efforts of the TDP project to develop an Armenian petroleum sector.
Mid-Jurassic volcanics, Late Cretaceous limestones, Eocene evaporites
and Oligocene sandstones are among the units in Armenia that have
exhibited significant oil and gas shows. Production from analogous
sediments is well established in neighboring Turkey, Georgia and
Azerbaijan. However, reservoir quality is problematic in many of
these fields.
One of the goals of the TDP project is to create interest on the
part of the international oil companies in exploration and production
in Armenia. This is to be accomplished by assembling data from Armenia,
reprocessing and reinterpreting this information, and offering the
material to the oil companies. Armenia would undoubtedly benefit
from advanced technologies, an infusion of capital and the diversity
of approaches offered by a variety of experienced oil companies
in a competitive environment. This may reasonably be expected to
lead to discovery of the country's first proven hydrocarbon reserves.
On the other hand, much of Armenia is not
favorable for oil and gas, and the favorable area is geographically
tiny. Despite more than 40 years of exploration, petroleum reserves
have not been established. The 700 million barrels "hidden" from
the Soviets should be considered a dubious resource until further
information is made available. The bulk of the undiscovered resources
could be gas prone.
Armenia's petroleum resources are woefully inadequate to sustain
its needs. Realization of the undiscovered potential will require
considerable investments of Western capital and technology. Even
if the undiscovered resources are developed, which is not at all
certain, Armenia will continue to play an infinitesimal role in
the oil and gas economy of the former Soviet Union and the world.
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