A Japanese-led consortium has signed a multi-billion dollar contract with the government of Azerbaijan to develop three off-shore oilfields in the Caspian sea.

The move comes just as some other consortiums are pulling out or cutting back their investment plans, because of disappointing results and the fall in oil prices.

Azeri officials have announced that one international consortium will be closing down after failing to strike oil in sufficient quantities and the BBC correspondent in Baku says another is expected to follow suit in the New Year.

Our correspondent says that a decision to build a high capacity pipeline to the West could now be delayed for months, if not years.