BP Exploration (Caspian Sea) Limited is the operator on behalf of the Contractor Parties to the ACG Production Sharing Agreement.
In 2018, we spent about $505 million in operating expenditure and $1,150 million in capital expenditure on ACG activities.
During the year, ACG continued to safely and reliably deliver stable production. Total ACG production for the full year was on average 584,000 barrels per day (b/d) (about 213 million barrels or 29 million tonnes in total) from the Chirag (46,000 b/d), Central Azeri (154,000 b/d), West Azeri (126,000 b/d), East Azeri (97,000 b/d), Deepwater Gunashli (105,000 b/d) and West Chirag (57,000 b/d) platforms.
At the end of the year, 117 oil wells were producing, while 44 wells were used for water and 7 for gas injection.
Drilling and completion
In 2018, ACG completed 14 oil producer wells and 3 water injectors.
In 2018, ACG delivered an average of about 6.4 million cubic metres per day of ACG associated gas to SOCAR (2.3 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.
In 2018, 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 55 million standard cubic metres of Shah Deniz gas, while overall processing and export capacity for gas, including ACG associated gas is around 75 million standard cubic metres per day.
During the year, the Sangachal terminal exported about 284 million barrels of oil. This included around 255 million barrels through Baku-Tbilisi-Ceyhan (BTC), about 28 million barrels through the Western Route Export Pipeline (WREP), and 1.3 million barrels via a separate condensate export line.
Gas is exported via the South Caucasus Pipeline (SCP) and via SOCAR gas pipelines connecting the Terminal’s gas processing facilities with Azerigas’s national grid system.
On average, about 28.4 million standard cubic metres (more than 1003 million standard cubic feet) of Shah Deniz gas was exported from the Terminal daily in 2018.
In 2018, BTC spent approximately $116 million in operating expenditure and about $41 million in capital expenditure.
Since the 1,768km BTC pipeline became operational in June 2006 till the end of 2018, it carried a total of about 3.12 billion barrels (around 417 million tonnes) of crude oil loaded on 4,085 tankers and sent to world markets.
During the year, BTC exported about 255 million barrels (around 34 million tonnes) of crude oil loaded on 327 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 2018, Shah Deniz spent more than $578 million in operating expenditure and more than $1.44 billion in capital expenditure, the majority of which was associated with the Shah Deniz 2 project.
During the year, the Shah Deniz field continued to provide deliveries of gas to markets in Azerbaijan, Georgia, Turkey and to BTC Company in multiple locations.
In 2018, the field produced 11.5 billion standard cubic metres (bcm) of gas and more than 2.5 million tonnes (20.5 million barrels) of condensate.
In 2018, Shah Deniz also celebrated 100 billion cubic metres of total gas production from the field since the start of operations. The milestone was achieved at the end of December, exactly 12 years after the first announcement of the start-up of commercial gas production from the field and start-up of operations of the South Caucasus Pipeline.
The existing Shah Deniz facilities’ production capacity is currently 48.0 million standard cubic metres of gas per day or around 16bcma.
During 2018, Shah Deniz Alpha platform drilled and completed the SDA11 well. Also integrity jobs were conducted on SDA04 and SDA05 wells.
The Istiglal drilling rig delivered five subsea completions – two on the West Flank and three on the East South Flank. The Maersk Explorer rig drilled the SDH02A well to the final depth.
The above two rigs have already drilled 15 wells in total for Shah Deniz 2 production and subsequent ramp up, and have completed four wells on the North Flank, four wells on the West Flank and three wells on the East South Flank. Drilling operations will continue to deliver all wells required to ramp up to plateau level.
After achieving significant commissioning and completion milestones across the whole gas value chain at the beginning of the year, the Southern Gas Corridor official inauguration event was held at the Sangachal Terminal on 29 May. This was followed by the commencement of commercial gas deliveries to Turkey from the Shah Deniz 2 development project as planned on 30 June 2018.
On 30 July, the wing valve on the North Flank subsea well SDC-03Z was opened, marking the first production from the Shah Deniz Bravo platform. This milestone marks the very first production from a subsea well in the Caspian, a significant achievement, which has been delivered safely, below budget and ahead of schedule. The Bravo facility is now exporting gas and condensate to the onshore terminal at Sangachal.
In 2018, SCP spent about $39 million in operating expenditure and about $352 million in capital expenditure.
The pipeline has been operational since late 2006, transporting Shah Deniz gas to Azerbaijan, Georgia and Turkey.
SCP’s daily average throughput was more than 23 million cubic metres of gas per day during the year of 2018.
The SCP has a dual operatorship with BP as the technical operator being responsible for construction and operation of the SCP facilities and SOCAR Midstream Operations, as commercial operator, responsible for SCP commercial operations.
During 2018, SCPX activities continued successfully along the pipeline route across Azerbaijan and Georgia. All infrastructure across the two countries required to support first commercial gas deliveries to Turkey were completed on schedule and were ready to operate before commencement of export on 30 June.
The pipeline is currently supporting Shah Deniz 2 commercial deliveries to Turkey with export volumes flowing through SCPX facilities.
Following completion of the processing and interpretation of the 3D data acquired from the Shallow Water Absheron Peninsula (SWAP) contract area, a Notice of Prospectivity was signed with SOCAR in 2018, signifying BP’s commitment to drill exploration wells in three prospective areas in shallow water Absheron.
Planning for the exploration wells drilling in the selected prospective areas is now ongoing. Following signature of the new production sharing agreement (PSA) for the joint exploration and development of Block D230 in April 2018, work started on the planning of a seismic acquisition programme which is expected to be conducted in 2019.
We are also continuing to plan the first exploration well on the Shafag-Asiman block.
In 2018, BP was assigned 61% participating interest in the existing onshore Gobustan PSA in Azerbaijan. As part of the assignment, BP, as operator, is planning to drill one exploration well in 2019.
At the end of 2018, the number of BP’s Azerbaijani national employees was 2,534 including fixed-term employees.
BP made a commitment in 2014 to achieve a nationalization target of 90 per cent professional staff by the end of 2018. BP is proud to have achieved that goal by mid-year primarily through development of its national staff which has resulted in nationalizing the majority of professional roles initially occupied by expatriate employees. Non-professional staff of BP in Azerbaijan is 100 percent nationalized.
BP will continue its efforts to optimize its learning and development programmes and will actively participate 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 2018, BP and the co-venturers in BP-operated joint ventures spent $3 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:
Further information: Tamam Bayatly at BP’s Press Office in Baku.
Telephone: (+994 12) 525 58 95