BP Exploration (Caspian Sea) Limited is the operator on behalf of the Contractor Parties to the ACG Production Sharing Agreement.In the first quarter of 2019, we spent about $138 million in operating expenditure and over $279 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.
During the first quarter of the year, ACG continued to safely and reliably deliver stable production. Total ACG production for the first three months of 2019 was on average 571,000 barrels per day (b/d) (about 52 million barrels or 7 million tonnes in total) from the Chirag (43,000 b/d), Central Azeri (146,000 b/d), West Azeri (128,000 b/d), East Azeri (100,000 b/d), Deepwater Gunashli (96,000 b/d) and West Chirag (58,000 b/d) platforms.At the end of the first quarter, 119 oil wells were producing, while 42 wells were used for water and 7 for gas injection.
Drilling and completion
In the first quarter, ACG completed 4 oil producer wells.
During the first quarter, ACG delivered an average of about 5.2 million cubic metres per day of ACG associated gas to SOCAR (0.5 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.
During the first three months of 2019, oil and gas from ACG and Shah Deniz continued to flow via subsea pipelines to the Sangachal terminal.
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 quarter, the Sangachal terminal exported more than 69 million barrels of oil. This included more than 61 million barrels through Baku-Tbilisi-Ceyhan (BTC) and around 8 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 47 million standard cubic metres (about 1656 million standard cubic feet) of Shah Deniz gas was exported from the terminal daily in the first quarter of 2019.
In the first quarter, BTC spent approximately $25 million in operating expenditure and about $6 million in capital expenditure.
Since the 1,768km BTC pipeline became operational in June 2006 till the end of the first quarter of 2019, it carried a total of about 3.2 billion barrels (around 425 million tonnes) of crude oil loaded on 4,159 tankers and sent to world markets.
During the first quarter of the year, BTC exported around 61 million barrels (over 8 million tonnes) of crude oil loaded on 74 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 quarter of 2019, Shah Deniz spent $191 million in operating expenditure and more than $267 million in capital expenditure, the majority of which was associated with the Shah Deniz 2 project.
During the first quarter 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 quarter, the field produced 4.3 billion standard cubic metres (bscm) of gas and about 1 million tonnes (7.5 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 more than 56 million standard cubic metres of gas per day or more than 20 bcma.
During the first quarter of 2019, Shah Deniz Alpha platform rig was on warm stack
.The Istiglal rig delivered one subsea well completion on the East South Flank and is currently performing completion operations on the West South Flank. The Maersk Explorer rig drilled one well to its final depth and moved to rig certification.
The above two rigs have already drilled and completed four wells on the North Flank, four wells on the West Flank and four wells on the East South Flank. 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 quarter of 2019, SCP and South Caucasus Pipeline Expansion (SCPX) spent about $9 million in operating expenditure and more than $17 million in capital expenditure in total.
The SCP has been operational since late 2006, transporting Shah Deniz gas to Azerbaijan, Georgia and Turkey while SCPX commenced commercial deliveries to Turkey in June 2018.
The daily average combined throughput of SCP and SCPX was about 30 million cubic metres of gas per day during the first quarter of 2019.
The SCP and SCPX have 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 three prospective 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 conduct a 3D seismic acquisition in 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 $0. 8 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 quarter of 2019, BP alone spent $0.14 million on sponsorship projects in Azerbaijan. These included:
Further information: Tamam Bayatly at BP’s Press Office in Baku.
Telephone: (+994 12) 525 58 95