Statoil announces end of share sale in Shah Deniz, SCP
By Aynur Jafarova
The Norwegian Statoil company has completed the sale of 10 percent of its 25.5-percent interest in the Shah Deniz Production Sharing Agreement and the South Caucasus Pipeline Company Limited.
The buyers of Statoil interest are Azerbaijan's state energy company SOCAR (6.7 percent) and British BP (3.3 percent), Statoil said.
The transactions were closed on May 1. The consideration for the sale and transfer of these assets is $1.45 billion.
The Norwegian company signed an agreement in December 2013 to divest a 10-percent share of its 25.5-percent holdings in the projects.
After the acquisitions, the Shah Deniz co-investors and their shares in the project are as follows: BP, operator (28.8 percent), SOCAR (16.7 percent), Statoil (15.5 percent), Total (10 percent), Lukoil (10 percent), NICO (10 percent), and TPAO (9 percent).
Shah Deniz reserves are estimated at 1.2 trillion cubic meters of gas. The cost of the second phase of development at Shah Deniz gas condensate field is estimated at $25 billion. Within the second phase of development, some 16 billion cubic meters of gas is planned to be produced, six billion of which will be transported to Turkey and ten billion to Europe.
Together with its partners in the Shah Deniz consortium in Azerbaijan, Statoil made a final investment decision for the second stage of development at the Shah Deniz gas field in the Caspian Sea on December 17.
The decision triggered plans to expand the South Caucasus Pipeline (SCPX) through Azerbaijan and Georgia, construct the Trans Anatolian Gas Pipeline (TANAP) across Turkey, and construct the Trans Adriatic Pipeline (TAP) across Greece, Albania, and into Italy.
These projects will create a new Southern Gas Corridor to Europe. The total cost of the Shah Deniz Stage 2 and the SCP Expansion projects will be around $28 billion.
Statoil entered Azerbaijan in 1992. The company's portfolio in Azerbaijan consists of 15.5 percent in the Shah Deniz project and SCP, 8.56 percent in Azeri-Chirag-Gunashli (ACG) and 8.71 percent in Baku-Tbilisi-Ceyhan (BTC) Pipeline. Statoil also holds 20 percent share in Trans-Adriatic Pipeline (TAP) AG which is developing the pipeline for transport of the Shah Deniz gas to European markets.