BP signs new deal on Azerbaijan's Shafag-Asiman block

Thu 07 October 2010 07:00 GMT | 12:00 Local Time

Text size: bigger smaller

SOCAR and BP have signed a Production Sharing Agreement on joint exploration and development of the Shafag-Asiman structure in the Caspian Sea

The contract was signed today by SOCAR President Rovnag Abdullayev and BP-Azerbaijan President Rashid Javanshir. BP’s new CEO, Robert Dudley, also attended the signing ceremony.

“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,” Robert Dudley said at the ceremony.

The signing of the PSA follows the earlier concluded Heads of Agreement which defined the basic commercial principles of the contract. Under the PSA, which is for 30 years, BP Exploration Caspian Sea Limited will be the operator with 50 per cent interest while SOCAR will hold the remaining 50 per cent equity.

The block lies some 125 kilometres south-east of Baku and has never been explored before. It is located in a deepwater section of about 650-800 metres with reservoir depth of about 7,000 metres.

SOCAR President Rovnag Abdullayev said in July that Shafag-Asiman was estimated to have gas reserves of 300-500bn cubic metres.

Speaking at today's signing ceremony, Robert Dudley said: “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. 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."

BP is already the operator of PSAs on Azerbaijan's major oil field, Azeri-Chiraq-Guneshli (ACG), and Shah Deniz gas field. From the start of oil production in November 1997 until 1 January 2010, ACG produced 181.4m tonnes of oil. Production in 2009 topped 40.2m tonnes of oil.

In 2009, 6.252bn cubic metres of natural gas were produced from Shah Deniz with additional production of 16bn cu.m per year expected in Stage 2 of development of the field, due in 2016.


See Also

BP’s new CEO visits Azerbaijan

Azerbaijan’s SOCAR and BP sign new agreement

SOCAR sends commercial proposals on development of two Caspian structures to BP



Most read articles

More from Economy

In The Region

Editor Picks

Azerbaijan Cuisine

Explore the food of Azerbaijan - from sherbet to succulent kebab, from baklava to fragrant pilaff

Follow us

Find us on Facebook

Real estate