BP Exploration (Caspian Sea) Limited is the operator on behalf of the Contractor Parties to the ACG Production Sharing Agreement.
In the first quarter of 2021, we spent more than $142 million in operating expenditure and more than $463 million in capital expenditure on ACG activities.
Despite the challenges and restrictions caused by the pandemic the Azeri Central East (ACE) project remained remarkably resilient during the first quarter of the year along with the other bp-operated activities.
The overall project detailed design engineering works were completed by the end of the quarter. The shipment of major equipment packages and bulk materials to Baku continued in support of the fabrication schedule.
Fabrication activities on the topsides and drilling facilities for the ACE platform continued at the fabrication yard in Bibi-Heybat. These included progressing the heavy lift programme with the installation of all the cellar deck panels, the lifting into position of the first weather deck sections, and several key drilling module lifts. The mechanical package installation progressed, the pipe fabrication, erection and cable pulling commenced. The mechanical equipment packages inspection and equipment deliveries continued with living quarters and major vessel delivery on plan. The living quarters modules have been shipped from Sweden and are expected to arrive in Baku in the second quarter of 2021.
At the Heydar Aliyev Baku Deepwater Jackets factory (BDJF) the jacket fabrication continued at multiple work fronts both in the workshops and on the skid-way. Fabrication activities on the subsea structures and spools also continued.
During the quarter, the project progressed the offshore installation works associated with the produced water management on the Central Azeri platform, as well as the preparation for commencing brownfield works on the East Azeri platform in the second quarter of 2021 to allow the ACE platform to draw power from the Azeri field optimising power generation across the assets. At the Sangachal terminal the design for the onshore control room was completed to allow for the planned modifications to commence in the fourth quarter.
Overall, the engineering, procurement and fabrication works remain on track to support first production from the ACE project in 2023.
During the first quarter, ACG continued to safely and reliably deliver stable production. Total ACG production for the quarter was on average about 484,000 barrels per day (b/d) (about 44 million barrels or 6 million tonnes in total) from the Chirag (30,000 b/d), Central Azeri (112,000 b/d), West Azeri (130,000 b/d), East Azeri (79,000 b/d), Deepwater Gunashli (89,000 b/d) and West Chirag (44,000 b/d) platforms.
At the end of the quarter, 133 oil wells were producing, while 45 were used for water and eight for gas injection.
Drilling and completion
In the first quarter of 2021, ACG completed three oil producer and two injector wells.
During the first quarter, ACG delivered an average of 11.6 million cubic metres per day of ACG associated gas to SOCAR (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 the first quarter of 2021, 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 condensate, and about 85 million standard cubic metres of Shah Deniz gas, while overall processing and export capacity for gas, including ACG associated gas is around 105 million standard cubic metres per day.
During the quarter, the Sangachal terminal exported more than 60 million barrels of oil and condensate. This included about 52 million barrels through Baku-Tbilisi-Ceyhan (BTC) and over 8 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, over 56 million standard cubic metres (more than 1,987 million standard cubic feet) of Shah Deniz gas was exported from the terminal daily in the first quarter of 2021.
In the first quarter of 2021, BTC spent more than $41 million in operating expenditure and more than $6 million in capital expenditure.
Since the 1,768 km BTC pipeline became operational in June 2006 till the end of the first quarter of 2021, it carried a total of 3.62 billion barrels (about 482 million tonnes) of crude oil loaded on 4,729 tankers and sent to world markets.
In the first quarter, around 51 million barrels (more than 6.7 million tonnes) BTC-exported crude oil was lifted at Ceyhan loaded on 70 tankers.
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 the first quarter of 2021, Shah Deniz spent around $688 million in operating expenditure and more than $181 million in capital expenditure, the majority of which was associated with the Shah Deniz 2 project.
During the quarter, 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. Gas deliveries to buyers in Europe that started on 31 December 2020 also continued during the first quarter of 2021.
In the first three months of 2021, the field produced more than 5.1 billion standard cubic metres (bcm) of gas and around 1 million tonnes (7.8 million barrels) of condensate in total from the Shah Deniz Alpha and Shah Deniz Bravo platforms.
The existing Shah Deniz facilities’ production capacity is currently over 58 million standard cubic metres of gas per day or more than 21 bcma.
During the first quarter of 2021, the Shah Deniz 2 project achieved further major milestones in progressing the production start-up from the deep-water East South Flank (at 540m water depth) which is planned for the second quarter of 2021. This will follow completion of the related offshore construction and commissioning works which are progressing successfully to meet the start-up delivery schedule.
During the first quarter of the year, the Shah Deniz Alpha platform rig was on warm stack.
The Istiglal rig delivered the SDF03 subsea completion and commenced the SDF04 completion operations. The Maersk Explorer drilled the SDH03 lower section to final depth and suspended the well.
The above two rigs have already drilled 21 wells in total, and completed 17 out of those, for Shah Deniz 2 production and subsequent ramp-up. The completed wells include four wells on the North Flank, four wells on the West Flank, four wells on the East South Flank, three wells on the West South Flank and two wells on the East North flank. Two wells on the West South flank, one well on the North Flank and one well on the East North flank were drilled to final depth and suspended. Drilling operations will continue to deliver all wells required to ramp up to plateau level.
In the first quarter of 2021, SCP spent more than $13 million in operating expenditure and more than $2 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 and to Europe in December 2020.
During the quarter, the daily average throughput of SCP was 50.74 million cubic metres of gas per day.
On the Shafag-Asiman offshore block, the drilling of the first exploration well was completed in March 2021 to the base of the Fasila reservoir to a depth of 7,189 metres. The well encountered gas condensate resource in the penetrated reservoirs. However, the resource will need further evaluation and therefore it was decided to suspend the well to allow the evaluation of its results and the planning of the next steps for appraisal, potentially including a sidetrack appraisal well.
In the Shallow Water Absheron Peninsula (SWAP) area, preparations are ongoing for drilling exploration wells in three prospective areas. The Environmental and Socio-economic Impact Assessment (ESIA) for the first SWAP well was disclosed in August 2020 and following public discussions was approved by the government in January 2021 providing permission to commence drilling activities in 2021.
On D230, the interpretation of the seismic data is currently ongoing. If the results from the interpretation of the seismic survey are positive, bp may start planning for an exploration well.
At the end of the first quarter of 2021, the number of bp’s Azerbaijani national employees was 2,425 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 the first quarter of 2021, bp and the co-venturers in bp-operated joint ventures spent more than $0.3 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 the first quarter of 2021, bp alone spent about $0.3 million on various social and sponsorship projects in Azerbaijan. These projects included:
Tamam Bayatly at bp’s press office in Baku.
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