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By Trend

Azerbaijan is a core area for BP company, said BP CEO Bob Dudley in an interview with Petroleum Intelligence Weekly.

"It's definitely a core area for BP, for a couple of reasons," he said. "One, we've signed a letter of intent on behalf of all the partners, [the partners for development of Azerbaijan’s Azeri-Chirag-Guneshli (ACG) block of oil and gas fields], to extend the ACG contract out to 2050, and later on this year we'll work out all the details of that contract. But that's a big indicator."

Second, the project for development of Azerbaijan’s largest gas field Shah Deniz is ahead of schedule, now in through Turkey, Greece, and it's come in under budget now, so that impacts the economics significantly, added Dudley.

"I wouldn't say at all it's not going to be economic at these gas prices," he said.

And then BP is doing a lot of separate exploration in the Caspian Sea, noted BP CEO.

He expressed confidence that the 25-year ACG extension will be finalized soon.

"I think it'll happen this year," he said. "The contract expires in 2024, but you don't want activity to drop off in the end of the contract period."

Dudley said he is hopeful the partners can agree with Azerbaijan’s state oil company SOCAR this year on extending it, which would be very far-sighted of the Azerbaijani government.

A contract for development of ACG block of oil and gas fields was signed in 1994. The proven oil reserves of the block near one billion tons.

The shareholders in the project are BP (operator of the Azeri-Chirag-Guneshli, 35.78 percent), Chevron (11.28 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).

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