2015 third quarter results

Shah Deniz participating interests are: BP (operator – 28.8 per cent), AzSD (10.0 per cent), SGC Upstream (6.7 per cent), Petronas (15.5 per cent), Lukoil (10 per cent), NICO (10 per cent) and TPAO (19 per cent).

During the first nine months of 2015, Shah Deniz spent approximately $370 million in operating expenditure and $3.37 billion in capital expenditure, the majority of which was associated with the Shah Deniz Stage 2 project.

Production

In the first nine 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 7.2 billion standard cubic metres (bcm) of gas and 1.66 million tonnes (about 13.4 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.

As part of the annual work programme, in August Shah Deniz implemented a planned Turn-around programme on the offshore platform, as well as on the Shah Deniz facility inside Sangachal Terminal.

In accordance with the plan, production was suspended for about 20 days to enable efficient maintenance, inspection and project work to be undertaken on both offshore platform and onshore facilities in Sangachal. This work was completed safely and was designed to maintain the long-term ability of the Shah Deniz plant to produce and export hydrocarbons in a safe, reliable and environmentally sound way.

Drilling

In the third quarter, the Shah Deniz Stage 1 platform continued drilling activities on SDA08 gas producer well and performed well-work activity on SDA07.

The Istiglal rig was transferred to the shipyard for rig certification and upgrade in July 2015. The Heydar Aliyev rig continued drilling operations in SDD04 well in support of the Shah Deniz Stage 2 pre-drill programme. These two rigs have already drilled eight production wells in preparation for the first gas and consequent production ramp up. Drilling operations will continue in order to deliver all wells required to reach the planned plateau level.

Shah Deniz Stage 2 Project

The South Caucasus Pipeline (SCP)

SCP Expansion (SCPX) Project

Exploration

People

Sustainable Development Initiatives

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, support for cultural legacy and sport, as well as technical assistance to public institutions.

During the first three quarters of 2015, BP and co-venturers spent $4.52 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:

BP and its co-venturers’ Enterprise Development and Training Programme (EDTP) which is a multi-million dollar initiative in support of local business development. The programme is part of BP’s and its co-venturers’ efforts to increase the local content of their contracts in Azerbaijan and contribute to the healthy and transparent development of local economy. Since its start the EDTP has aimed to contribute to the broadening of Azerbaijan’s economic base and to enhance the capacity of local firms to compete in domestic markets and the wider Caspian region and beyond. The EDTP has proven to be an excellent opportunity for local enterprises to reach international standards and compete for supply contracts in the oil and gas industry.
The School of Project Management (SPM) established by BP and its co-venturers in Azerbaijan. The school is designed to develop project management capabilities of individuals representing the private and public sectors. In March 2014, BP and its co-venturers extended their support for the SPM until November 2015 by signing a new Memorandum of Understanding on extension of the initiative.
BP and its co-venturers are also co-operating with SOCAR in the training and development of national workforce and in the human resources area. The companies continue to work together to create training and development opportunities for Azerbaijani nationals specializing in the oil and gas industry related disciplines. As part of this commitment BP and co-venturers have already provided vocational and technical discipline training support for a large group of representatives of the local communities residing in the neighbourhood of the Sangachal Terminal - Sangachal, Umid, Azimkend and Gobustan settlements. BP and co-venturers plan to continue this support.
BP was an Official Partner of the Baku 2015 European Games. This allowed BP to assist elite athlete development in Azerbaijan and to support a group of national athletes. As part of this partnership BP continued to help fund the development of aspiring medal hopes for Azerbaijan. In addition, as part of this project, BP was the exclusive Official Partner of the Baku 2015 Games Academy initiative, an innovative learning programme which supported the creation of a capability legacy in Azerbaijan. For more information please visit: bp.com/baku2015.
BP's ongoing support for the Baku-based Qafqaz University to broaden its scope to cover undergraduate education in three engineering disciplines, including chemical, mechanical and civil engineering. As part of this project the chemical engineering department was established in 2009 and in 2011, BP opened five fully equipped modern laboratories for this department. In 2011, the mechanical engineering department was opened at the university and in December 2013, BP presented eleven world-class laboratories to this department.
BP’s ‘Business Journalism’ training programme to help develop national business journalism capacity and link local journalists with international journalistic standards. Some 12 journalists gained international practice through this training programme.
BP’s business lectures at Baku Higher Oil School, which are designed to support national petroleum engineers’ development in Azerbaijan. In addition to a series of lectures presented by BP experts and senior executives, Gordon Birrell, BP’s Regional President for Azerbaijan, Georgia and Turkey, has met with the teaching staff and students of Baku Higher Oil School sharing his own experience in the industry and information about BP operations and plans.

ACG participating interests are: BP (operator – 35.8 per cent), SOCAR (11.6 per cent), Chevron (11.3 per cent), INPEX (11 per cent), Statoil (8.6 per cent), ExxonMobil (8 per cent), TPAO (6.8 per cent), ITOCHU (4.3 per cent), ONGC Videsh Limited (OVL) (2.7 per cent).

The BTC Co. shareholders are: BP (30.1 per cent); AzBTC (25.00 per cent); Chevron (8.90 per cent); Statoil (8.71 per cent); TPAO (6.53 per cent); ENI (5.00 per cent); Total (5.00 per cent), ITOCHU (3.40 per cent); INPEX (2.50 per cent), CIECO (2.50 per cent) and ONGC (BTC) Limited (2.36 per cent).

Shah Deniz participating interests are: BP (operator – 28.8 per cent), AzSD (10.0 per cent), SGC Upstream (6.7 per cent), Petronas (15.5 per cent), Lukoil (10 per cent), NICO (10 per cent) and TPAO (19 per cent).

The SCP Co. shareholders are: BP (28.8 per cent), AzSCP (10.0 per cent), SGC Midstream (6.7 per cent), Petronas (15.5 per cent), Lukoil (10 per cent), NICO (10 per cent) and TPAO (19 per cent).