Azernews.Az

BAKU – Oil giant BP plans to begin drilling an exploration well on the Shafag-Asiman structure in the Azerbaijani sector of the Caspian Sea in the second half of 2016, under the agreement signed with Azerbaijan’s state oil company Socar in 2010, a BP Azerbaijan representative said Thursday.

"The exploration period can be divided into three stages: first, conduct of 3D-seismic surveys, second - processing and interpretation of the data and the third one - drilling of exploration wells," BP Azerbaijan Geological Exploration Group Head Arzu Javadova told public hearings on the report regarding the environmental impact of seismic surveys on the block.

BP Azerbaijan and Caspian Geophysical signed a contract for carrying out 3D-seismic surveys in May.

Javadova said the first phase will be completed in 2011, while the data processing is scheduled for 2012 and its interpretation for 2013 and the first half of 2014.

"The process of planning the drilling work and exploration wells will be carried out from the second half of 2014 till the first half of 2016. Accordingly, BP plans to drill exploration wells from the second half of 2016 till the second half of 2017," Javadova said.

She added that a number of challenges for developing the fields are ahead, particularly high water depth, high pressure and temperature.

The production sharing agreement on joint exploration and development of the Shafag-Asiman structure was signed in October 2010. Under the PSA, which covers 30 years, BP Exploration (Azerbaijan) Limited is the project operator with 50 percent interest, while Socar holds the other 50 percent equity.

The block lies some 125 kilometers (78 miles) to the southeast of Baku. It covers an area of some 1,100 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 7,000 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.

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 oil export pipeline and the Baku-Supsa pipeline stretching to the Black Sea coast of Georgia.