During the first half of 2015, we spent approximately $359 million in operating expenditure and $949 million in capital expenditure on ACG activities.
Production
During the first half of 2015, ACG continued to deliver stable production. Total ACG production in the first six months was on average 641,000 barrels per day (b/d) (116 million barrels or 16 million tonnes in total) from the Chirag (55,000 b/d), Central Azeri (157,000 b/d), West Azeri (107,000 b/d), East Azeri (71,000 b/d), Deepwater Gunashli (145,000 b/d) and West Chirag (106,000 b/d) platforms.
As part of its ACG annual work programme, we implemented a planned facility shut down programme (turnaround - TAR) on the West Azeri platform in May.
In accordance with the plan, production from the West Azeri platform was suspended in May for about 22 days to enable efficient maintenance, inspection and project work to be undertaken. This work was completed safely and is designed to maintain the long-term ability of the platform to produce in a safe, reliable and environmentally sound way.
At the end of the second quarter, 87 oil wells were producing, while 40 wells were used for gas or water injection.
Drilling and completion
During the first half of 2015, ACG delivered nine oil producer wells and one water injector.
Associated gas
During the first six months, ACG delivered an average of 11.4 million cubic metres per day of ACG associated gas to SOCAR (2.1 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 mainly re-injected for reservoir pressure maintenance.
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 with Azerigas’s national grid system.
In the first half of 2015, the Sangachal terminal exported about 154 million barrels of oil and condensate. This included about 135 million barrels through Baku-Tbilisi-Ceyhan (BTC), over 16.3 million barrels through the Western Route Export Pipeline (WREP), about 2.2 million barrels by rail and about 0.9 million barrels via a condensate export line.
On average, 28.8 million standard cubic metres (1,017 million standard cubic feet) of Shah Deniz gas was exported from the terminal daily during the first half of 2015.
During the first half of 2015, BTC spent approximately $73 million in operating expenditure and $15 million in capital expenditure.
BTC’s throughput capacity is currently 1.2 million barrels per day.
The 1,768km BTC pipeline became operational in June 2006. Since that time BTC has carried a total of 2.23 billion barrels (around 298 million tonnes) of crude oil loaded on 2,940 tankers and sent to world markets.
In the first half, BTC exported about 135 million barrels (18 million tonnes) of crude oil loaded on 188 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.
During the first half of 2015, Shah Deniz spent approximately $0.25 billion in operating expenditure and $2.26 billion in capital expenditure, the majority of which was associated with the Shah Deniz Stage 2 project.
Production
In the first six months, 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).
During this period, the field produced 5.2 billion standard cubic metres (bcm) of gas and 1.2 million tonnes (about 9.8 million barrels) of condensate.
The existing Shah Deniz facilities’ production capacity is currently 29.5 million standard cubic metres of gas per day or around 10bcma.
Drilling
In the second quarter, the existing Shah Deniz Stage 1 platform completed the SDA07 gas producer well and continued drilling another production well, whilst the Istiglal and Heydar Aliyev rigs continued drilling operations in support of the Shah Deniz Stage 2 pre-drill programme. The Istiglal rig was transferred to the shipyard for rig certification and upgrade in July 2015. The Heydar Aliyev rig will continue drilling activities. These two rigs have already drilled eight production wells in preparation for the first gas and consequent production ramp up. Drilling operations will continue towards delivery of all wells required to reach the planned plateau level.
In the first half, the Shah Deniz Stage 2 project continued to move ahead with a number of milestones achieved ahead of schedule.
The project is currently progressing at pace with wide scale activities ongoing at all offshore and onshore sites/fabrication yards of the country including the Sangachal Terminal, ATA (AMEC/Tekfen/Azfen) yard near Baku, Baku Deepwater Jackets Factory (BDJF) and along the pipeline route. In particular, the platform decks and jackets are taking shape at the ATA and BDJF yards, respectively.
A major milestone was the safe and successful transportation and installation of the project’s first pin piles. These eight pin piles are the first pieces of permanent equipment for the platforms now fixed on the seabed.
The project has already awarded the major engineering, construction and supply contracts, valued at about $11 billion. Two further contracts were awarded in June, in support of the development of future flanks following first gas in 2018.
In Azerbaijan, over 15,000 people are involved in construction activities across all main contracts and over 85% of them are Azerbaijani nationals.
In the first half of 2015, SCP spent about $22 million in operating expenditure and $559 million in capital expenditure.
The pipeline has been operational since late 2006, transporting Shah Deniz gas to Azerbaijan, Georgia and Turkey.
In the first half, SCP’s daily average throughput was 20.34 million cubic metres of gas per day.
The SCP has a dual operatorship with BP as the technical operator being responsible for construction and operation of the SCP facilities and SOCAR, as commercial operator, is responsible for SCP's business administration.
In the first half of 2015, SCPX activities continued along the pipeline route across Azerbaijan and Georgia. Stocks of pipe have been building up at the pipe yards along the route with more than one-third of the pipe needed for the Azerbaijan section already in the yards.
A major milestone was achieved during the first half of 2015 with commencing the mainline construction in Azerbaijan at the end of June. Since then, pipeline construction has continued to ramp up and approximately 10km of pipe has now been welded and a further 7km strung out along the right of way ahead of time.
Other key achievements to date include:
In the first half of 2015, BP completed the interpretation of the seismic dataset for Shafag-Asiman. This work required some 18 months to complete and is followed by another year required for planning of the first exploration well.
BP also signed a new production sharing agreement (PSA) with SOCAR in December 2014 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. This PSA was ratified by the Milli Majlis (Parliament of Azerbaijan) on 14 April 2015. This enables BP to move forward with its commitments under this PSA using its experience and advanced technology solutions from other shallow water areas around the world.
At the end of the second quarter, BP employed directly 2,866 Azerbaijani nationals. Some 86% of BP’s permanent professionals in Azerbaijan are nationals and many of them are in senior leadership positions.
BP continues to focus on the training of nationals including technicians who are trained in the Caspian Technicians Training Centre (CTTC). Over the 10 years of its existence CTTC has successfully trained more than 1,000 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 continues the training of selected national engineers through the world-class training initiative called “Petro-technical Resource Entry Programme” (PREP). This is a multi-million dollar learning programme designed for national 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.
During the first half of 2015, BP and co-venturers spent $2.56 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:
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Further information: Tamam Bayatly at BP’s Press Office in Baku.
Telephone: (+994 12) 599 45 57