BP Exploration (Caspian Sea) Limited is the operator on behalf of the Contractor Parties to the ACG Production Sharing Agreement.
In the first half of 2019, we spent more than $272 million in operating expenditure and over $657 million in capital expenditure on ACG activities.
In April 2019, the ACG partnership took a decision to commence the next stage of development of the ACG field with a $6 billion project which includes a new offshore platform and facilities designed to process up to 100,000 barrels of oil per day. The project is expected to achieve first production in 2023 and produce up to 300 million barrels of oil over its lifetime.
The project has already started construction activities (started in July) and will continue to ramp up these activities through the second half of the year.
During the first half of the year, ACG continued to safely and reliably deliver stable production. Total ACG production for the first six months of 2019 was on average 542,400 barrels per day (b/d) (more than 98 million barrels or 13 million tonnes in total) from the Chirag (42,000 b/d), Central Azeri (131,000 b/d), West Azeri (120,000 b/d), East Azeri (94,000 b/d), Deepwater Gunashli (more than 96,000 b/d) and West Chirag (60,000 b/d) platforms.
At the end of the first half, 124 oil wells were producing, while 44 wells were used for water and 7 for gas injection.
In the first half, ACG completed 7 oil producer wells.
During the first half, ACG delivered an average of over 5 million cubic metres per day of ACG associated gas to SOCAR (0.9 billion cubic metres in total), primarily at the Sangachal Terminal but also to SOCAR’s Oil Rocks facility. The remainder of the associated gas produced was re-injected for reservoir pressure maintenance.
The daily capacity of the terminal’s processing systems is currently 1.2 million barrels of crude oil and about 80 million standard cubic metres of Shah Deniz gas, while overall processing and export capacity for gas, including ACG associated gas is around 100 million standard cubic metres per day.
During the first half, the Sangachal terminal exported about 134 million barrels of oil. This included around 121 million barrels through Baku-Tbilisi-Ceyhan (BTC) and more than 13 million barrels through the Western Route Export Pipeline (WREP).
Gas is exported via the South Caucasus Pipeline (SCP), the South Caucasus Pipeline expansion system and via SOCAR gas pipelines connecting the terminal’s gas processing facilities with Azerigas’s national grid system.
On average, about 46 million standard cubic metres (about 1,610 million standard cubic feet) of Shah Deniz gas was exported from the terminal daily in the first half of 2019.
In the first half, BTC spent approximately $55 million in operating expenditure and about $12 million in capital expenditure.
Since the 1,768 km BTC pipeline became operational in June 2006 till the end of the first half of 2019, it carried a total of more than 3.2 billion barrels (more than 432 million tonnes) of crude oil loaded on 4,234 tankers and sent to world markets.
During the first half of the year, BTC exported over 120 million barrels (about 16 million tonnes) of crude oil loaded on 149 tankers at Ceyhan.
The BTC pipeline currently carries mainly ACG crude oil and Shah Deniz condensate from Azerbaijan. In addition, other volumes of crude oil and condensate continue to be transported via BTC, including volumes from Turkmenistan, Russia and Kazakhstan.
In the first half of 2019, Shah Deniz spent around $376 million in operating expenditure and $555 million in capital expenditure, the majority of which was associated with the Shah Deniz 2 project.
During the first half of the year, the Shah Deniz field continued to provide deliveries of gas to markets in Azerbaijan (to SOCAR), Georgia (to GOGC and SOCAR), Turkey (to BOTAS) and to BTC Company in multiple locations.
In the first half, the field produced around 8.4 billion standard cubic metres (bscm) of gas and about 2 million tonnes (14.4 million barrels) of condensate in total from the Shah Deniz Alpha and Shah Deniz Bravo platforms.
Production from Shah Deniz Bravo has been ramping up since the first gas delivery at the end of last July.
The existing Shah Deniz facilities’ production capacity is currently over 56 million standard cubic metres of gas per day or more than 20 bcma.
During the first half of 2019, Shah Deniz Alpha platform rig was on warm stack and then commenced rig maintenance
The Istiglal rig delivered one subsea well completion on the East South flank, two completions on the West South flank and is currently performing the same operations on the East North flank. The Maersk Explorer rig drilled one well to its final depth and one top hole on the North flank and then moved to the West South flank to drill two top holes.
The above two rigs have already drilled and completed four wells on the North Flank, four wells on the West Flank, four wells on the East South Flank and two wells on the West South Flank in total for Shah Deniz 2 production and subsequent ramp up.
16 wells have been drilled by the Maersk Explorer rig in total for Shah Deniz 2 production and subsequent ramp up. Drilling operations will continue to deliver all wells required to ramp up to plateau level.
In the first half of 2019, SCP spent about $20 million in operating expenditure and more than $24 million in capital expenditure in total.
The SCP has been operational since late 2006, transporting Shah Deniz gas to Azerbaijan, Georgia and Turkey. The expanded section of the pipeline commenced commercial deliveries to Turkey in June 2018.
The daily average throughput of SCP was about 28 million cubic metres of gas per day during the first half of 2019.
The SCP has a dual operatorship with BP as the technical operator being responsible for construction and operation of the pipeline facilities and SOCAR Midstream Operations, as commercial operator, responsible for the commercial operations of the pipeline.
On Shafag-Asiman, planning for the drilling of the first exploration well continues. Current plans are to commence drilling activities later this year.
Planning for the exploration wells drilling in the selected threprospective areas on Shallow Water Absheron Peninsula (SWAP) is
ongoing with the view to commence to drill the first well later this year.
On Block D230, we are planning to commence a 3D seismic acquisition in the fourth quarter of 2019. Based on the results of the seismic survey we will begin planning of the first exploration well in 2020.
At the end of the second quarter of 2019, the number of BP’s Azerbaijani national employees was 2,510 including fixed-term employees.
Since mid-2018, 90 per cent of BP Azerbaijan’s professional staff has been nationals.
Non-professional staff of BP in Azerbaijan is 100 percent nationalized.
During the first half of the year, ten senior national employees of BP Azerbaijan were appointed to leadership roles in BP’s UK, Iraq, Russia and other offices.
BP will continue its efforts to optimize its learning and development programmes and will activelyparticipate in public and private sector initiatives contributing to the development of the local talent market.
The success of projects in the Caspian region depends, in part, on the operators’ ability to create tangible benefits from these projects for the people of the region. To achieve this, BP and the co-venturers continue to implement major social investment projects, which include educational programmes, building skills and capabilities in local communities, improving access to social infrastructure in communities, supporting local enterprises through provision of access to finance and training, support for cultural legacy and sport, as well as technical assistance to public institutions.
In the first quarter of 2019, BP and the co-venturers in BP-operated joint ventures spent $1.4 million in Azerbaijan alone on social investment projects.
BP (on behalf of the co-venturers in the joint ventures that it operates) will continue their social investment initiatives in support of local capacity-building and enterprise development throughout Azerbaijan to assist the country in strengthening its economy.
Some examples of such projects in Azerbaijan are:
In addition, in the first half of 2019, BP alone spent $0.4 million on sponsorship projects in Azerbaijan. These included: