BP Exploration (Caspian Sea) Limited is the operator on behalf of the Contractor Parties to the ACG Production Sharing Agreement.
In 2019, we spent about $567 million in operating expenditure and $1,476 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 incremental up to 300 million barrels of oil over its lifetime.
In 2019, the project awarded the main fabrication, marine and subsea contracts and started construction activities in July. These activities continued to ramp up through the year.
Currently, topsides and drilling rig fabrication and assembly are progressing in accordance with the plan at the Bibi-Heybat yard, jacket and pin pile fabrication is progressing ahead of schedule at the Heydar Aliyev Baku Deepwater Jackets Factory (BDJF) with the view to install the pin piles later this year, living quarters module fabrication is progressing ahead of schedule in Sweden, subsea pipe coating qualification testing has commenced.
During the year, ACG continued to safely and reliably deliver stable production. Total ACG production for the full year was on average about 535,000 barrels per day (b/d) (more than 195 million barrels or 26 million tonnes in total) from the Chirag (41,000 b/d), Central Azeri (134,000 b/d), West Azeri (121,000 b/d), East Azeri (89,000 b/d), Deepwater Gunashli (96,000 b/d) and West Chirag (54,000 b/d) platforms.
At the end of 2019, 125 oil wells were producing, while 46 wells were used for water and seven for gas injection.
Drilling and completion
In 2019, ACG completed 10 oil producer wells and one water injection well.
During the year, ACG delivered an average of 5.7 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 re-injected for reservoir pressure maintenance.
In 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.
In 2019, the Sangachal terminal exported about 263 million barrels of oil. This included about 235 million barrels through Baku-Tbilisi-Ceyhan (BTC) and about 28 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, more than 45 million standard cubic metres (about 1,600 million standard cubic feet) of Shah Deniz gas was exported from the terminal daily in 2019.
In 2019, BTC spent approximately $138 million in operating expenditure and about $44 million in capital expenditure.
Since the 1,768 km BTC pipeline became operational in June 2006 till the end of 2019, it carried a total of more than 3.35 billion barrels (more than 447 million tonnes) of crude oil loaded on 4,381 tankers and sent to world markets.
In 2019, BTC exported around 233 million barrels (about 31 million tonnes) of crude oil loaded on 296 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 2019, Shah Deniz spent about $544 million in operating expenditure and $1.1 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 (to SOCAR), Georgia (to GOGC and SOCAR), Turkey (to BOTAS) and to BTC Company in multiple locations.
In 2019, the field produced around 16.8 billion standard cubic metres (bcm) of gas and 3.5 million tonnes (28.6 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 July 2018.
The existing Shah Deniz facilities’ production capacity is currently over 56 million standard cubic metres of gas per day or more than 20 bcma.
Shah Deniz 2 project
In 2019, Shah Deniz 2 project achieved final acceptance of offshore and onshore facilities. The project team continued to support operations through the first year of production to ensure high operating efficiencies of the Shah Deniz 2 assets.
During the year the project continued to perform subsea construction activities, including installation of infrastructure to the deep-water flanks to support the next East South flank start-up in 2021. Delivery of subsea assets and installation activities using the subsea construction vessel Khankendi and the pipelay barge Israfil Huseynov will continue over the coming years to deliver plateau gas production.
In 2019, Shah Deniz Alpha platform rig was on warm stack and conducted rig maintenance and TAR in between.
The Istiglal rig delivered one subsea well completion on the East South flank, two completions on the West South flank and two completions on the East North flank. The rig then drilled top holes of two East North flank wells. The Maersk Explorer rig drilled SDH01 well to its final depth, one top hole on the North flank and two top holes on the West South flank. The rig then drilled SDF03 well on the West South flank to its final depth and commenced drilling the lower section of SDF04 well.
The above two rigs have already drilled 17 wells in total, and completed 16 out of those, for Shah Deniz 2 production and subsequent ramp up (four wells on the North Flank, four wells on the West Flank, four wells on the East South Flank, two wells on the West South Flank and two wells on the East North flank, one well on the West South flank was drilled to its final depth and suspended). Drilling operations will continue to deliver all wells required to ramp up to plateau level.
In 2019, SCP spent about $48 million in operating expenditure and about $34 million in capital expenditure in total.
The SCP has been operational since late 2006, transporting Shah Deniz gas to Azerbaijan, Georgia and Turkey. The expanded section of the pipeline commenced commercial deliveries to Turkey in June 2018.
During 2019, the daily average throughput of SCP was 29 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 pipeline facilities and SOCAR Midstream Operations, as commercial operator, responsible for the commercial operations of the pipeline.
On the Shafag-Asiman offshore block, the first exploration well was spudded on 13 January 2020. The well is expected to take around nine months to drill. Following this, the well data will be analyzed and, if successful, an evaluation programme may be conducted to confirm the results.
On D230, a 3D seismic acquisition programme commenced in December 2019. These activities are currently ongoing. It is expected that the programme will be completed in the 1st half of 2020. This will be followed by the processing and interpretation of the acquired data. Based on the results of the seismic survey we will begin planning of the first exploration well in 2020.
In the Shallow Water Absheron Peninsula planning for the exploration wells drilling in the selected three prospective areas is ongoing with the view to commence drilling activities later this year once the upgrade of the rig selected to drill the first well is completed.
At the end of 2019, the number of BP’s Azerbaijani national employees was 2,534 including fixed-term employees.
Since mid-2018, 90% of BP Azerbaijan’s professional staff has been nationals. Non-professional staff of BP in Azerbaijan is 100% 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 2019, BP and the co-venturers in BP-operated joint ventures spent $3 million in Azerbaijan 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 2019, BP alone spent $1.2 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