BP could find new gas giant offshore Azerbaijan

11 January 2019 10:03 (UTC+04:00)

By Leman Mammadova

BP Plc and its partners just spent $28 billion bringing a giant natural gas project in Azerbaijan online, and that may only be the start, Trend reports citing Gary Jones, BP’s regional president for Azerbaijan, Georgia and Turkey.

Jones said that the BP intends to drill six new exploration wells in Azerbaijan by 2020, emphasizing that the company can discover a new gas field with reserves approximately equal to Shah Deniz if his expectations are met.

“Alongside Brazil, Azerbaijan stands out in terms of the areas of focus for the next few years,” Jones said in a phone interview. “It’s a very significant exploration program for us, which demonstrates the confidence and the role that we see in the Caspian.”

BP aims to drill wells this year in the Shafag-Asiman structure, where gas reserves may be equal to the Shah Deniz-2 field. He added that the drilling on the structure is scheduled for the end of 2019.

Jones said capital spending decisions haven’t yet been affected by a decline in oil prices late in the year, though it renewed BP’s focus on finding out whether there are more big fields in Azerbaijan.

Upon completion, the Shah Deniz 2 project will add a further 16 bcm of natural gas per annum to 10.9 bcma (maximum production capacity) already produced under Shah Deniz 1 project.

Shah Deniz 2 is the starting point of the new Southern Gas Corridor, which will deliver Caspian resources directly to European markets for the first time.

So far, the total gas production from the Shah Deniz field has reached 100 billion cubic meters. Since 2006, more than 196 million barrels of condensate have been produced in the Shah Deniz field in total.

Its reserves are estimated at 1.2 trillion cubic meters of gas and 240 million tons of condensates. Within the second stage of the field development, the volume of gas production can be increased to 24 billion cubic meters per year, according to forecasts.

Shah Deniz field covers approximately 860 square kilometres. The field was discovered in 1999.

The discovery of the giant Shah Deniz field and the successful implementation of the project made Azerbaijan a country that can export a large amount of natural gas to the world.

The Shah Deniz gas field is still the biggest discovery of BP after the Prudhoe Bay oilfield in Alaska. SOFAZ (Azerbaijani Oil Fund) has so far earned $ 2.5 billion from the development of Shah Deniz.

The agreement on the exploration, development and shared production of promising areas of Shah Deniz was signed on June 4, 1996. The agreement on the division of production was ratified on October 17, 1996.

The project participants are BP (operator - 28.8 percent), AzSD (10 percent), SGC Upstream (6.7 percent), Petronas (15.5 percent), LUKOIL (10 percent), NIKO (10 percent) and TPAO (19 percent).

BP is one of the world's most renowned oil and gas suppliers and its operations cover the safe development and production of key energy sources, and has been managing large projects for exploration, development and transportation of oil and gas fields in Azerbaijan for 26 years safely and reliably.

BP and SOCAR have long-term cooperation in the oil and gas industry of Azerbaijan. BP Azerbaijan is operator of ACG, Shahdeniz, Shallow Water Absheron Peninsula, Shafag-Asiman and Gobustan fields.

So far, BP has invested more than $ 72 billion in projects in the country with its partners.

BP and Azerbaijan are also cooperating to explore the development opportunities of renewable energy.

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