Azernews.Az

By Nigar Orujova

BP's Executive Vice President on production Bob Fryar said on Wednesday that the company is going to bring its best resources around the world to increase production at the Azeri-Chirag-Guneshli (ACG) block of oil fields in the Azerbaijani sector of the Caspian Sea.

As a follow up to last week's London meetings, a group of BP senior executives representing BP's upstream production, development, and strategy and integration divisions held a three-day working visit to Baku to continue the discussions about production from the ACG fields, as well as to review BP's future plans for the region.

Azerbaijani President Ilham Aliyev at a recent cabinet meeting criticized BP saying serious mistakes of the BP-operated international consortium, Azerbaijan International Operating Company, have led to a sharp decline in oil production on Azeri and Chirag fields, which are part of the ACG development. Aliyev said BP failed to meet the production target in 2009-12, which resulted in Azerbaijan's receiving $8.1 billion less in direct revenue.

BP senior executives Baku visit included a meeting with state oil company SOCAR leadership and a series of internal meetings with BP's regional leadership and staff.

BP Executive Vice President Bernard Looney said each of the meetings has been helpful and has contributed to identifying a clear way forward which lays outthe company's immediate tasks ahead.

"I would like to thank SOCAR's leadership for their cooperation and intention to work with us as we address ACG production issues for the benefit of the Azerbaijani nation and ACG partners. They clearly want us to be successful, and together we will take the right actions to continue to deliver a world-class business in Azerbaijan," Looney said.

The meetings in Baku specifically focused on defining a course of action to address ACG production issues.

"We remain committed to resolving ACG production issues and in order to do this as quickly as possible we have committed to bringing here BP's best global resources from all over the world," Fryar said.

He also noted that the ACG partnership has been very successful over the past 18 years.

"We clearly now have a challenge but we are committed to working through it as quickly as possible together with SOCAR, the government of Azerbaijan and our partners," Fryar added.

According to the head of SOCAR Rovnag Abdullayev, partners in the project on tapping the Azeri-Chirag-Guneshli block of oil fields are developing a program that forecasts ACG production until 2024.

Abdullayev said on Wednesday that according to the program on ACG production in 2013, 2014 and the period 2014-2024, production is projected to stabilize at 33 million tons (700,000 barrels a day) of oil in 2013. The following year, it will increase to 35 mln tons. From 2014 to 2024, the production volume will be stable again at 33 mln tons.

"According to our experts, these are very good results," Abdullayev noted.

According to Abdullayev, reasons for the decline in ACG production are technical.

Following the problems BP faced in the Gulf of Mexico and a gas leak detected on ACG in 2008, the ACG operator chose 'to give up the risks rather than to manage them'. In other words, this was not a mistake.

In response to criticism BP Azerbaijan said that the company is fully committed to Azerbaijan and working with SOCAR to address the ACG production issues as quickly as possible.

In addition, BP has agreed to continue "working closely" with SOCAR to manage oil production from the giant ACG fields for the benefit of Azerbaijan and its partners.

A landmark agreement on developing the ACG fields was signed with 13 energy majors from eight countries in Baku in 1994. ACG participating interests are: BP (35.83%), SOCAR (11.65%), Chevron (11.27%), Inpex (10.96%), Statoil (8.56%), ExxonMobil (8%), TPAO (6.75%), Itochu (4.3%), and Hess (2.72%). Hess has sold its share in the project to India's ONGC, and the transaction will be completed in the first quarter of 2013.

New appointments

A new vice president on wells, Jim Cowei, has been appointed at BP Azerbaijan on October 17. Cowei previously held the similar post in the BP project in the North Sea.

Cowei will succeed Gary Christman on this post from Nov.15, who became vice-president of the BP's Global Wells Institute.

Another vice president on pipelines and terminals of BP Azerbaijan Kemp Copeland retired a week before Christman.

As BP Azerbaijan spokesperson Tamam Bayatli noted all reshuffles in the company have been carefully planned for a long time before their implementation. It also concerns the recent reshuffles.