TODAY.AZ / Business

BP says 'Contract of Century' may be extended in mid-2017

06 February 2017 [15:32] - TODAY.AZ

By Azernews


By Nigar Abbasova

BP’s Regional President for Azerbaijan, Georgia and Turkey Gordon Birrell announced that fully-termed agreement on further development of the Azeri-Chirag-Gunashli (ACG) in the Azerbaijani sector of the Caspian Sea maybe signed in the short run.

Birrell, talking to reporters in Baku on February 6, said that the company expects it to be signed by mid this year.

“The letter of intent was signed in December 2016. The negotiations are underway and we think the PSA will be signed by mid-2017”, he said.

Azerbaijan’s state oil company SOCAR and BP-operated Azerbaijan International Operating Company (AIOC) signed an agreement on future development of the ACG field on December 23. The agreement will cover the development of the field until 2050 and will add significant resource development potential.

The document agreed the key commercial terms for the future development of the ACG field and enabled the parties to conclude negotiations and finalize fully-termed agreements in the next few months.

Birrell further mentioned that BP is very pleased with the letter of intent signed with SOCAR for the future development of the block.

The BP official didn’t give any further comment on the details of the new agreement, adding that it is premature to disclose the BP’s vision, plans and schemes of the further development of the ACG, as the negotiations are still ongoing.

The existing ACG PSA was signed in September 1994 for 30 years. Oil production from the field began in November 1997.

To date the field has produced 416.5 million tons of oil and 128.2 bcm of associated gas. Some 231.8 million tons of the total volume of the oil produced at the block accounted for profitable oil. The volume of average monthly production stands at 2.5 million tons of oil.

ACG is a super-giant field located about 100 km east of Baku. It is the biggest producing oil field in the Caspian Sea and covers an area of more than 432 square kilometers. The field lies in water depths of between 120 and 170 metres. The depth of the reservoir is 2,000-3,500 metres.

BP Azerbaijan operates the development of the ACG block. The contract for development of the ACG block was signed in 1994 for a period of 30 years.  Shareholders of the project are BP (35.78 percent), Chevron (11.27 percent), Inpex (10.96 percent), AzACG (11.65 percent), Statoil (8.55 percent), Exxon (8 percent), TPAO (6.75 percent), Itochu (4.3 percent) and ONGC (2.72 percent).

URL: http://www.today.az/news/business/158367.html

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