In 2014, we spent approximately $1 billion in operating expenditure and $2.3 billion in capital expenditure on ACG activities.
In 2014, ACG marked a major milestone by starting production from the Chirag Oil Project (COP). First Oil from the West Chirag platform was achieved on 28 January from one of the pre-drilled wells. Since that time West Chirag production has been increasing to its current level of over 90,000 barrels per day from six wells.
In 2014, ACG continued to deliver stable production. Total ACG production in 2014 was on average 638,000 barrels per day (b/d) (233 million barrels or 31.5 million tonnes in total) from the Chirag (61,900 b/d), Central Azeri (156,500 b/d), West Azeri (149,300 b/d), East Azeri (74,200 b/d), Deepwater Gunashli (145,900 b/d) and West Chirag (50,200 b/d) platforms.
At the end of the year, a total of 84 oil wells were producing, while 39 wells were used for gas or water injection.
As part of the ACG annual work programme, a planned maintenance programme (turnaround - TAR) was implemented on the Central Azeri platform on 31 October - 27 November. Such activities are an important part of maintaining the high plant efficiencies that have been achieved on ACG.
Drilling and completion
In 2014 ACG delivered 14 oil producer wells and 4 water injection wells and 1 cutting re-injector well.
In 2014, ACG continued to deliver associated gas from the DWG platform via the 28” gas subsea pipeline directly to the Sangachal terminal and from there into Azerigas’ national grid system for domestic use.
Gas from the three Azeri platforms - CA, WA and EA – continued to be sent via in-field subsea gas pipelines to the compression and water injection platform on CA. From CA it was partly re-injected to maintain pressure in the reservoir and partly delivered to the Sangachal terminal.
Most of the associated gas from West Chirag was exported to the Sangachal terminal.
Most of the associated gas produced from the Chirag platform continued to be sent to the SOCAR compression station at the Oil Rocks. In 2014 we completed the planned work on the flash gas compressors and pipelines which allowed us to significantly reduce flaring on Chirag.
In 2014, ACG delivered an average of 7.55 million cubic metres per day of ACG associated gas to SOCAR (2.76 billion cubic metres in total).
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 oil and about 29.5 million standard cubic metres of Shah Deniz gas, while overall processing and export capacity for gas, including ACG associated gas is about 49.3 million standard cubic metres per day.
Gas is exported via the South Caucasus Pipeline (SCP) and via a SOCAR gas pipeline connecting the terminal’s gas processing facilities and Azerigas’s national grid system.
In 2014, the Sangachal terminal exported over 298.5 million barrels of oil. This included over 260 million barrels through Baku-Tbilisi-Ceyhan (BTC), over 31.4 million barrels through the Western Route Export Pipeline (WREP), about 5.3 million barrels by rail and about 1.84 million barrels via a condensate export line.
In 2014, BTC spent $0.2 billion in operating expenditure and $0.1 billion in capital expenditure.
BTC’s throughput capacity is currently 1.2 million b/d.
The 1,768km BTC pipeline became operational in June 2006. Since that time BTC has carried a total of about 2.1 billion barrels (280 million tonnes) of crude oil loaded on 2793 tankers and sent to world markets.
In August, BTC celebrated the loading of the 2 billionth barrel of oil at the Ceyhan terminal in Turkey.
In 2014, BTC exported 262 million barrels (34.8 million tonnes) of crude oil loaded on 362 tankers at Ceyhan.
The BTC pipeline currently carries mainly ACG oil and Shah Deniz condensate from Azerbaijan. In addition, crude oil from Turkmenistan and Kazakhstan continues to be transported via BTC. In addition, in February 2014, the direction of flow through the SOCAR-operated Northern Route Export Pipeline (NREP) was successfully reversed. This was a result of a collaborative effort by BP and SOCAR to activate some facilities along NREP. Commercial agreements were finalised which allowed NREP volumes to be exported via BTC.
In 2014, Shah Deniz spent approximately $0.4 billion in operating expenditure and $3.9 billion in capital expenditure, the majority of which was associated with the Shah Deniz Stage 2 project.
In 2014, the Shah Deniz field continued to provide reliable deliveries of gas to markets in Azerbaijan (to SOCAR), Georgia (to GOGC), BTC Company and Turkey (to BOTAS).
In 2014, the field produced 9.9 billion standard cubic metres of gas and 2.3 million tonnes (18.7 million barrels) of condensate.
During 2014, the existing Shah Deniz facilities were further de-bottlenecked which increased their production capacity from 27.3 million standard cubic metres to 29.5 million standard cubic metres of gas per day.
In 2014, Shah Deniz completed a number of major well work-over jobs which enhanced reliability and integrity of the existing well stock and commenced drilling a new production well.
Throughout 2014 the Istiglal and Heydar Aliyev rigs continued drilling operations in support of the Shah Deniz Stage 2 pre-drill programme. These two rigs have already completed seven production wells in preparation for the first gas. Drilling operations will continue towards delivery of all wells required to reach the planned plateau level.
In 2014, the Shah Deniz Stage 2 project made a very good progress with a number of milestones achieved ahead of schedule including yard upgrades and commencement of fabrication of decks, jackets and subsea equipment.
Most of the major engineering, construction and supply contracts, valued at about $10 billion, were awarded and work started in all construction areas across Azerbaijan.
In Azerbaijan, over 9,500 people are already involved in construction activities across all main contracts and 90% of them are Azerbaijani nationals.
On 20 September, the Sangachal Terminal near Baku hosted the groundbreaking for the Southern Gas Corridor. This marked a major milestone in the realisation of the project which will provide for export of 16 billion cubic metres per year (bcma) of gas from the giant Shah Deniz field through some 3,500 kilometres of pipelines to Georgia, Turkey, Greece, Bulgaria, Albania and Italy.
In 2014, SCP spent about $50 million in operating expenditure and $0.9 billion in capital expenditure.
The pipeline has been operational since late 2006, transporting gas to Azerbaijan and Georgia, and starting July 2007 to Turkey from Shah Deniz Stage 1.
During 2014, SCP’s daily average throughput was 18.286 million cubic metres of gas per day.
In 2014 SCPX project contracts award continued with most of the major contracts already awarded and work already started along the pipeline route across Azerbaijan and Georgia. Shipments of pipe sections started in 2014 and will continue throughout 2015 and into early-2016. In total, over 40,000 sections of pipe will be delivered in 19 shipments. The key achievements made to date include:
Activity on the SCPX project will continue during 2015 including the commencement of pipe-laying activity in Azerbaijan and Georgia.
In 2014, we completed the Shafag-Asiman data processing and started interpretation of the seismic dataset, which will require some 18 months to complete. This will be followed by another year required for planning of the first exploration well.
In 2014, we also signed a new exploration contract with SOCAR to jointly explore for and develop potential prospects in the shallow water area around the Absheron Peninsula in the Azerbaijan sector of the Caspian Sea.
At the end of 2014 BP employed directly 2,992 Azerbaijani nationals. Some 86% of BP’s permanent professionals in Azerbaijan are nationals and many of them are in senior leadership positions.
In 2014 BP continued to focus on the training of nationals including technicians who are trained in the Caspian Technicians Training Centre (CTTC) at Sangachal. Over the 10 years of its existence CTTC has successfully trained about 900 national technicians for BP-operated facilities. The role of these highly qualified technicians is critical to running all of BP-operated facilities both onshore and offshore safely and reliably.
BP also successfully manages a world-class training initiative called “Petro-technical Resource Entry Programme” (PREP) for national engineers. It is a multi-million dollar learning programme designed for petro-technical graduates and is aimed at supporting capability development of young engineers joining BP.
In addition, BP remains committed to achieving a target to reach 90% professional staff nationalization rate by the end of 2018. This envisages nationalizing some of the professional roles that are currently occupied by the expatriate staff. Non-professional staff is already 100% nationalized. The nationalization agenda also includes further optimization of BP’s learning and development programmes, close participation in the public and private sector initiatives in order to further improve the local talent market and enhancing the rigorous internal performance management process.
The success of BP-operated projects in the Caspian, in part, depends on the operator’s ability to create tangible benefits from these projects for the people of the regional countries. To achieve this, BP continues to implement major sustainable development initiatives, 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, as well as technical assistance to public institutions.
In 2014 BP and co-venturers spent over $5.87 million in Azerbaijan alone on such sustainable development projects.
BP and its co-venturers will continue their sustainable development initiatives to support local enterprise development and capacity-building throughout Azerbaijan to assist the country in strengthening its economy.
Some examples of such initiatives are:
Further information: Tamam Bayatly at BP’s Press Office in Baku.
Telephone: (+994 12) 599 45 57