Azernews.Az

BAKU – Oil giant BP and Azerbaijan's state energy firm SOCAR on Thursday signed a new production sharing agreement on joint exploration and development of the Shafag-Asiman structure in the Azerbaijan sector of the Caspian Sea.

Under the PSA, which covers 30 years, BP Exploration (Azerbaijan) Limited will be the operator with 50 percent interest, while SOCAR will hold the remaining 50 percent equity.

The block lies some 125 kilometers (78 miles) to the southeast of Baku. It covers an area of some 1100 square kilometers and has never been explored before. It is located in a deepwater section of about 650-800 meters with reservoir depth of about 7000 meters. Gas reserves of the structure are estimated at 300-500 billion cubic meters.

Exploration work will be carried out over four years, with a possible extension for another three years. Two wells are to be drilled in the initial stage. Two more wells will be drilled during the following stage if a need arises.

The PSA was signed in Baku by Rovnag Abdullayev, President of SOCAR, and Rashid Javanshir, BP Azerbaijan President, in the presence of BP’s visiting Group Chief Executive Officer (CEO) Robert Dudley.

"This is an important day for Azerbaijan and BP as it marks the beginning of our bilateral cooperation in exploration and development of a new offshore block," Dudley said at the event. "With SOCAR and our partners BP has helped to establish Azerbaijan as a world scale oil and gas producer, and I believe the significant remaining potential will continue to make it relevant for decades to come."

"We in BP very much hope that the combination of our leading technology and expertise with Azerbaijan’s experience and potential will lead to new discoveries in the Caspian," Dudley added.

BP, the top foreign investor in Azerbaijan’s energy sector, operates the country’s Azeri-Chirag-Gunashli (ACG) block and the Shahdaniz gas-condensate field in the Caspian Sea. The company also runs the Baku-Tbilisi-Ceyhan (BTC) main export pipeline and the Baku-Supsa pipeline stretching to the Black Sea coast of Georgia.