Azernews.Az

By Kamila Aliyeva

Since November 1997 up till now, 454 million tons of oil has been extracted from the Azeri-Chirag-Gunashli (ACG) block of oil and gas fields in the Azerbaijani sector of the Caspian Sea.

Azerbaijani Energy Minister Parviz Shahbazov made the statement addressing the third SOCAR International Caspian and Central Asia Downstream Forum on Trading, Logistics, Refining and Petrochemicals kicked off in Baku on April 23.

He said that 144 billion cubic meters of associated gas were also extracted from the ACG.

“The income from the ACG block amounted to $131 billion,” Shahbazov added.

Speaking at the conference, first vice-president of Azerbaijan’s state oil company SOCAR Khoshbakht Yusifzade said that 56.6 percent of the total volume produced at the ACG block of oil and gas fields since the beginning in 1997 till April 1, 2018, accounted for the share of Azerbaijan’s profitable oil.

He noted that 256 million tons out of 453 million tons of oil produced at the ACG accounted for the share of Azerbaijan’s profitable oil.

Yusifzade added that the share of Azerbaijan’s profitable oil will continue to rise.

He went on to say that $43 billion have been invested in the development of the ACG block so far, and the same amount will be invested as part of the new agreement on the block’s development.

A contract for developing the ACG field was signed in 1994. The proven oil reserves of the block near one billion tons. A ceremony to sign a new contract on development of the ACG block of oil and gas fields was held in Baku on September 14, 2017.

The new ACG participating interests are as follows: BP - 30.37 percent; AzACG (SOCAR) - 25 percent; Chevron - 9.57 percent; INPEX - 9.31 percent; Statoil - 7.27 percent; ExxonMobil - 6.79 percent; TP - 5.73 percent; ITOCHU - 3.65 percent; ONGC Videsh Limited (OVL) - 2.31 percent.

Vice president for Communications, External Affairs, Strategy & Region at BP Azerbaijan-Georgia-Turkey Bakhtiyar Aslanbayli, who also attended the event, noted that Azerbaijan is the most important and priority direction for business in the BP global portfolio.

“BP’s activity in Azerbaijan started in 1994 with the signing of the Contract of the Century and since then many goals were implemented at the international level through the joint efforts of the company and the government of Azerbaijan. The Baku-Tbilisi-Ceyhan oil pipeline is one of the projects of a global scale. As of today, BP has built eight offshore platforms in Azerbaijan,” he said.

Aslanbayli noted that the West Azeri, the East Azeri, the Shah Deniz Stage 1 and the Shah Deniz Stage 2 are also large-scale projects with BP’s participation in Azerbaijan.

“We apply the latest experience and technologies when working on the offshore oil and gas fields of Azerbaijan. The Shah Deniz Stage 2 project for underwater gas production, which attracts a great number of foreign investments, is the most difficult to implement, and it is almost 99 percent complete. The Khankendi vessel for underwater construction work worth $378 million was used September 2017 as part of the Shah Deniz Stage 2 project,” he said.

Aslanbayli went on to say that so far, 3.3 billion barrels of oil were produced at the Azeri-Chirag-Gunashli (ACG) field, while 89 billion cubic meters of gas and 76 million barrels of gas condensate were produced at the Shah Deniz field.

The profit of Azerbaijan from the ACG and Shah Deniz projects was $132 billion, he added.

Aslanbayli further noted that BP is exploring new promising fields in Azerbaijan.

“There are several new priority oil and gas fields on the Absheron Peninsula. BP seeks to begin their development in the near future. Presently, geological exploration is underway on these fields,” he said.

Among the projects, Aslanbayli mentioned the Shafag-Asiman block of fields, as well as the promising offshore block D230, an agreement on which BP plans to sign with Azerbaijan's SOCAR in the coming days.

SOCAR and BP signed a contract on the Shafag-Asiman block of fields for a period of 30 years in October 2010. The exploration period is four years with a possibility of extension for three more years. Two wells are to be drilled within the first phase. Two more wells will be drilled within the second phase, if necessary.

In the operational period the sides will implement joint operatorship within the project. Shared participation in the contract between BP and SOCAR is 50 to 50 percent.

The forecasted reserves of the Shafag-Asiman block stand at 500 billion cubic meters of gas and 65 million tons of condensate. The block is located 125 kilometers to the south-east of Baku. Exploration work has not been conducted on the block yet. It is located at a depth of 650-800 meters with the depth of the reservoir at 7,000 meters.

In May 2016, BP and SOCAR signed a memorandum of understanding (MOU) to jointly explore potential prospects in the block D230 in the North Absheron Basin in the Azerbaijan sector of the Caspian Sea.

The block covers areas in a water depth of up to 300 meters with the reservoir depth of 3,000-5,000 meters.

Fuad Ahmadov, deputy director of SOCAR Polymer, a polymer plant of Azerbaijan’s state oil company SOCAR, speaking at the event said that plants for the production of polypropylene and polyethylene as part of the SOCAR Polymer project’s implementation will be launched in the second and third quarters of 2018.

He noted that the launch of a polypropylene plant, the construction of which is completed by 96.7 percent, is expected in June 2018.

This is while the launch of a polyethylene plant, the construction of which is completed by 80.1 percent, is expected in the third quarter of 2018, he added.

“The cost of the SOCAR Polymer project is $800 million, and it is aimed at producing the currently demanded products made of polyethylene and polypropylene, which will be exported to the markets of Turkey and CIS member countries in the future, and also will be used in Azerbaijan’s domestic market,” Ahmadov said.

He noted that the government of Azerbaijan renders great support in implementing the company’s project, exempting the company from such taxes as VAT and others.

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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva

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