BP Exploration (Caspian Sea) Limited is the operator on behalf of the Contractor Parties to the ACG Production Sharing Agreement.
In the first half of 2021, we spent about $266 million in operating expenditure and more than $846 million in capital expenditure on ACG activities.
Despite the challenges and restrictions caused by the pandemic, the Azeri Central East (ACE) project remained resilient during the first half of the year along with the other bp-operated activities.
The shipment of major equipment packages and bulk materials to Baku continued in support of the fabrication schedule. The subsea structure and spools installation engineering works were completed in the second quarter.
Fabrication activities on the topsides and drilling facilities continued at the fabrication yard in Bibi-Heybat. These included progressing the drill floor fabrication on the drilling equipment support module, mechanical package installation, pipe fabrication, erection and cable pulling. The skid deck rail machining commenced. The living quarters modules were delivered to Baku and offloaded at the yard, with the first three modules already lifted.
At the Heydar Aliyev Baku Deepwater Jackets factory (BDJF) the jacket fabrication continued at multiple work fronts. Welding of the centre box frames progressed, preparation for the jacket skidding commenced. During the second quarter, the project also progressed the offshore installation works associated with the spare power scope on the East Azeri platform, to allow the ACE platform to draw power from the Azeri field optimising power generation across the assets.
At the Sangachal terminal, the design of the onshore control room was completed allowing to commence the planned modifications in the fourth quarter.
Overall, the engineering, procurement and fabrication works remain on track to support first production from the ACE project in 2023.
In the first half of 2021, ACG completed a high-density seismic survey aimed to better understand the reservoir and target production and water injection activities to maximize efficient production from the ACG field. The survey activities, which lasted six months and involved three vessels, were delivered safely and on schedule. In addition to the crewed vessels, an unmanned surface vessel (USV) and a mini remotely operated underwater vehicle (ROV) were utilized during the survey.
During the second quarter, ACG continued to safely and reliably deliver stable production. Total ACG production for the first half of 2021 was on average about 468,000 barrels per day (b/d) (about 85 million barrels or 11 million tonnes in total) from the Chirag (30,000 b/d), Central Azeri (111,000 b/d), West Azeri (118,000 b/d), East Azeri (78,000 b/d), Deepwater Gunashli (88,000 b/d) and West Chirag (43,000 b/d) platforms.
As part of our ACG annual work programme, a planned maintenance programme (turnaround - TAR) was successfully implemented on the West Azeri platform in the second quarter.
In accordance with the plan, production from the West Azeri platform was suspended for about 13 days to enable efficient maintenance, inspection and project work. The programme, which was designed to maintain the long-term ability of the platform to produce in a safe, reliable and environmentally sound way, was completed safely and ahead of schedule.
At the end of the quarter, 131 oil wells were producing, while 44 were used for water and eight for gas injection.
Drilling and completion
In the first half of 2021, ACG completed six oil producer and three injector wells.
During the first half, ACG delivered an average of 9.1 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.
In the first half of 2021, BTC spent more than $69 million in operating expenditure and more than $12 million in capital expenditure.
Since the 1,768 km BTC pipeline became operational in June 2006 till the end of the second quarter of 2021, it carried a total of 3.66 billion barrels (more than 488 million tonnes) of crude oil loaded on 4,796 tankers and sent to world markets.
In the first half, around 99 million barrels (more than 13 million tonnes) BTC-exported crude oil was lifted at Ceyhan loaded on 137 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 half of 2021, Shah Deniz spent more than $1.14 billion in operating expenditure and around $366 million in capital expenditure, the majority of which was associated with the Shah Deniz 2 project.
In the second quarter of the year, Shah Deniz celebrated its 25th anniversary since the signing of the Shah Deniz Production Sharing Agreement (PSA). The PSA was signed on 4 June 1996 between SOCAR and a consortium of foreign companies. It was ratified by the Milli Majlis and became effective on 17 October the same year. The Shah Deniz 25th anniversary marks an important milestone in the new history of Azerbaijan’s oil and gas industry.
During the first six months, 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 half of 2021.
In the first half of the year, the field produced 10 billion standard cubic metres (bcm) of gas and around 1.9 million tonnes (15.1 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 about 70 million standard cubic metres of gas per day or more than 25 bcma.
In the second quarter of 2021, the Shah Deniz 2 project achieved the start-up of the East South flank at 540m water depth – a major milestone planned for 2021 and delivered safely, on schedule and within the budget. Production from this deep-water flank commenced on 30 June following the successful completion of all related offshore construction and commissioning works. It is expected that the flank will be at full production rates in the third quarter of 2021.
During the second quarter of 2021, the Shah Deniz Alpha platform rig was on warm stack.
The Istiglal rig delivered three subsea wells completions - SDF03, SDF04 and SDC05. The Maersk Explorer drilled the SDH03 lower section to its final depth and suspended the well.
The above two rigs have already drilled 21 wells in total and completed 19 out of those for Shah Deniz 2 production and subsequent ramp-up. The completed wells include five wells on the North Flank, four wells on the West Flank, four wells on the East South Flank, four wells on the West South Flank and two wells on the East North flank. One well on the West South flank and one well on the East North flank were drilled to final depth and suspended.
In the first half of 2021, SCP spent around $27 million in operating expenditure and around $11 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 first half of 2021, the daily average throughput of SCP was 46.51 million cubic metres of gas per day.
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 half of 2021, bp and the co-venturers in bp-operated joint ventures spent about $0.5 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 half of the year, bp alone spent more than $0.4 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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