BAKU, Azerbaijan, March 10 (UPI) -- German energy giant and Nabucco project member RWE signed a memorandum of understanding for oil and gas exploration in Azerbaijan, the company said Wednesday.
RWE and the State Oil Co. of the Azerbaijan Republic signed an MOU to explore the hydrocarbon potential in the Nakhichevan deposit.
The deposit is in the Caspian Sea about 50 miles south of Baku, the capital of Azerbaijan. Estimates of the structure's natural gas reserves top 1 trillion cubic feet.
RWE is one of the six members of the consortium overseeing development of the Nabucco gas pipeline for Europe. The project is seen as a way to break the Russian stranglehold on the European gas sector by moving gas from Central Asia and the Middle East through Turkey.
"Europe needs access to the immense oil and gas reserves in the Caspian Sea," said RWE Chairman Jurgen Grossmann.
The European Commission last week said it would dedicate $270 million to the Nabucco gas pipeline.
The 2,000-mile Nabucco is to deliver 1.1 trillion cubic feet of natural gas to European markets each year. The project remains controversial, however, as it has not yet secured gas supplies. Gas deliveries are expected through Nabucco by 2014.
