BP Exploration (Caspian Sea) Limited is the operator on behalf of the Contractor Parties to the ACG Production Sharing Agreement.
In the first three quarters of 2019, we spent more than $418 million in operating expenditure and about $1,034 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.
The project has already awarded the main fabrication, marine and subsea contracts and has started construction activities (started in July). These activities continued to ramp up through the third quarter of the year.
During the first three quarters of the year, ACG continued to safely and reliably deliver stable production. Total ACG production for the first nine months of 2019 was on average about 541,000 barrels per day (b/d) (about 148 million barrels or 20 million tonnes in total) from the Chirag (41,000 b/d), Central Azeri (133,000 b/d), West Azeri (121,000 b/d), East Azeri (92,000 b/d), Deepwater Gunashli (95,000 b/d) and West Chirag (59,000 b/d) platforms.
At the end of the third quarter, 124 oil wells were producing, while 42 wells were used for water and seven for gas injection.
Drilling and completion
By the end of the third quarter, ACG completed nine oil producer wells.
During the first three quarters, ACG delivered an average of 5.7 million cubic metres per day of ACG associated gas to SOCAR (1.6 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.
During the first three quarters of 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 the three quarters of 2019, the Sangachal terminal exported more than 198 million barrels of oil. This included over 178 million barrels through Baku-Tbilisi-Ceyhan (BTC) and over 20 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, about 44 million standard cubic metres (about 1,548 million standard cubic feet) of Shah Deniz gas was exported from the terminal daily during the three quarters of 2019.
In the first three quarters, BTC spent approximately $95 million in operating expenditure and about $25 million in capital expenditure.
Since the 1,768 km BTC pipeline became operational in June 2006 till the end of the third quarter of 2019, it carried a total of 3.3 billion barrels (around 440 million tonnes) of crude oil loaded on 4,307 tankers and sent to world markets.
During the three quarters of the year, BTC exported more than 177 million barrels (about 24 million tonnes) of crude oil loaded on 222 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 the first three quarters of 2019, Shah Deniz spent around $481 million in operating expenditure and $818 million in capital expenditure, the majority of which was associated with the Shah Deniz 2 project.
During the first three quarters of 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 the three quarters, the field produced around 12.2 billion standard cubic metres (bscm) of gas and 2.6 million tonnes (about 21 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 last July.
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 Alpha platform rig was on warm stack in the first half of the year and then commenced rig maintenance.
The Istiglal rig delivered several subsea well completions - one on the East South flank, two on the West South flank, one on the East North flank and continues delivering the second one on the East North flank. The Maersk Explorer rig drilled one well to its final depth, one top hole on the North flank and two top holes on the West South flank. Currently the rig is drilling the lower section of one well on the West South flank.
The above two rigs have already drilled and completed 16 wells in total (four on the North Flank, four on the West Flank, four on the East South Flank, two on the West South Flank and two on the East North flank) for Shah Deniz 2 production and subsequent ramp up. Drilling operations will continue to deliver all wells required to ramp up to plateau level.
In the first three quarters of 2019, SCP spent about $33 million in operating expenditure and more than $28 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.
The daily average throughput of SCP was about 28 million cubic metres of gas per day during the first three quarters of 2019.
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 Shafag-Asiman, planning for the drilling of the first exploration well continues. Current plans are to commence drilling activities in December this year.
Planning for the exploration wells drilling in the selected three prospective areas on Shallow Water Absheron Peninsula (SWAP) is ongoing with the view to commence drilling activities in the first half of 2020.
On Block D230, we are planning to commence a 3D seismic acquisition programme in November 2019. Based on the results of the seismic survey we will begin planning of the first exploration well in 2020.
At the end of the third quarter of 2019, the number of BP’s Azerbaijani national employees was 2,524 including fixed-term employees.
Since mid-2018, 90 per cent of BP Azerbaijan’s professional staff has been nationals.
Non-professional staff of BP in Azerbaijan is 100 per cent 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 three quarters of 2019, BP and the co-venturers in BP-operated joint ventures spent $2.2 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:
In addition, in the first three quarters of 2019, BP alone spent $0.7 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